The recent surge in this IT stock can be attributed to a combination of strategic contract wins, heightened market activity, and a strong focus on future growth opportunities, all of which contributed to its impressive rise in stock price.
Price Variation
Shares of Tera Software Ltd were trading at Rs.78.29 per share on November 4, rising 178.88 percent from there to the current share price of Rs.218.26 apiece in just three weeks. The shares of the company hit a 5 percent upper circuit on Tuesday reaching the intra-day high from its previous close of Rs.207.87 per share.
Reasons for the rise
● Financial Performance
Tera Software Ltd, with a market capitalization of Rs.273 crores, reported Q2 FY25 revenue of Rs.25.34 crores, reflecting a 20 percent YoY increase and a 2 percent QoQ rise. The company achieved a net profit of Rs.1.37 crores, compared to a loss of Rs.0.49 crores in Q2 FY24, although PAT declined 59 percent from Rs.3.34 crores in Q1 FY25.
The company maintains a strong current ratio of 2.00 and a low debt-to-equity ratio of 0.25, indicating solid liquidity. Its Return on Capital Employed (ROCE) and Return on Equity (ROE) are 7.79 percent and 3.78 percent, respectively.
● Major contract win
Tera Software, in partnership with ITI, has secured the lowest bid for three packages of the BharatNet Phase-3 project, valued at Rs.3,022 crore. The project aims to improve broadband connectivity in rural regions across multiple states. This major contract win has sparked significant investor confidence, boosting expectations for the company’s future revenue potential.
The company also secured two Spot Billing System projects, valued at Rs.169.66 crore from PVVNL and Rs.166.32 crore from DVVNL. These projects involve meter reading and bill collection services for over 56 lakh consumers in multiple cities over three years.
● Technological Advancements
The company is investing in emerging fields such as AI and cybersecurity to capitalize on future growth prospects. By aligning with cutting-edge technologies, it aims to enhance its market position and build investor confidence in its long-term potential.
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Shareholding Pattern
According to the September 2024 shareholding pattern, Tera Software Ltd. is primarily owned by retail investors, who hold 52.46 percent of the stake, while the promoters hold 47.53 percent of the company’s shares.
About the Company
TSL is a professional service provider in the IT industry, known for executing Build-Operate-Transfer (BOT) projects across 22 states in India. The company operates over 3,000 outlets nationwide and focuses on delivering hardware and software services through long-term contracts primarily with government organizations. .
Written by – Siddesh S Raskar
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