Dark horse stock of the day: Softtech Engineers gains 20% in a weak market

Shares of Softtech Limited witnessed a significant surge today. The stock opened trading at Rs 179.40 per share, representing a weak opening with a 1.42% decrease compared to the previous day’s closing price of Rs 182 per share on the BSE.

As of writing this article, the stock is trading at Rs 218.40, which is a 19.99% increase from its previous closing price, reaching the upper circuit price limit of 20%. Currently, there are no sellers willing to sell the shares in the market. Moreover, there has been a significant increase in trading volumes in the company’s stock, exceeding 14.20 times the daily average trading volumes.

Furthermore, the stock reached its 52-week high price today, with the 52-week high and low prices at Rs 218.40 and Rs 130, respectively. With a market capitalization of Rs 221 crore, the stock has demonstrated outstanding performance in recent periods, delivering a 41% return within a month.

Company Profile

SoftTech Engineers Limited, an India-based IT and software services company, specialises in software development and offers software support and maintenance services to its clients. The company is a leading provider of software solutions in the architecture-engineering-construction (AEC) sector, serving a diverse clientele that includes property developers, municipal corporations, investors, real estate firms, contractors, architects, and consultants.

It boasts a product portfolio consisting of five key offerings: AutoDCR, PWIMS, OPTICON, BIMDCR, and RuleBuddy. AutoDCR, for instance, is an online system for scrutinizing and approving building plans, capable of reading computer-aided design (CAD) drawings.

Financial Performance

In the June quarter of FY24, the company’s revenue from operations experienced a significant increase of 55% YoY, rising from Rs 12 crore to Rs 18.81 crore. The company reported an operating profit of Rs 4.75 crore, compared to the operating profit of Rs 3.75 crore in the corresponding quarter last year, resulting in an operating profit margin of 25.25%.

Meanwhile, the net profit of the company amounted to Rs 0.50 crore, representing a 29% decrease compared to the profit of Rs 0.70 crore in the corresponding quarter of the previous year. In the last quarter of FY23, the company reported a net profit of Rs 0.13 crore.

The company’s ROCE (Return on Capital Employed) and ROE (Return on Equity) stand at 7.85% and 4%, respectively. Furthermore, the shares are trading at a price-to-earnings ratio of 64.8 in the market.

Stock Price Chart (Weekly time frame) 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.