CG-VAK Software - CG-VAK Software

📊 BSE: 531489 🏢 Computers - Software & Consulting 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations was INR 5,400.73 Lakhs in FY25, a marginal decrease of 0.017% from INR 5,401.68 Lakhs in FY24. The core segment, Offshore Software Services, contributed INR 5,397.59 Lakhs, remaining virtually flat compared to INR 5,397.70 Lakhs in the previous year.

Geographic Revenue Split

The company has a high geographic concentration with North America contributing 81% of total revenue, while the Rest of the World accounts for the remaining 19%.

Profitability Margins

Operating profit margin remained stable at 23% YoY. Net profit margin improved from 16% in FY24 to 17% in FY25, driven by a 0.83% increase in Profit After Tax (INR 891.74 Lakhs vs INR 884.43 Lakhs).

EBITDA Margin

Operating profit before working capital changes stood at INR 1,374.39 Lakhs (25.4% margin), representing a 6.24% increase from INR 1,293.63 Lakhs in FY24.

Capital Expenditure

Capital expenditure on property, plant, and equipment surged by 966% to INR 921.21 Lakhs in FY25, compared to INR 86.37 Lakhs in FY24, indicating significant investment in infrastructure or technology upgrades.

Credit Rating & Borrowing

The company maintains a very low debt profile with a Debt-Equity ratio of 0.01. There are no formal bank borrowings reported in current or non-current liabilities as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

As a software services firm, the primary 'raw material' is technical manpower. Employee benefits expense of INR 3,617.54 Lakhs represents 67% of total revenue.

Import Sources

Not applicable for software services; talent is primarily sourced from India for offshore delivery.

Capacity Expansion

Current employee strength is 273 as of March 31, 2025. Planned expansion in headcount or infrastructure is supported by the INR 9.21 Cr capex in FY25.

Raw Material Costs

Employee costs decreased by 1.54% YoY from INR 3,674.13 Lakhs to INR 3,617.54 Lakhs, helping to maintain margins despite flat revenue.

Manufacturing Efficiency

Not applicable; however, Debtors Turnover improved significantly from 59 days to 46 days, indicating better working capital efficiency.

Logistics & Distribution

Not applicable for digital software delivery.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The company is focusing on high-growth segments like Outsourced Product Development (OPD) and leveraging rapid advances in digital technologies including GenAI, analytics, cyber security, and cloud to win new deals and drive sustainable growth.

Products & Services

Offshore software services, Outsourced Product Development (OPD), Product Engineering, and Innovation services.

Brand Portfolio

CG-VAK

New Products/Services

AI-driven delivery methods and GenAI-integrated software solutions are being developed to enhance the Product Engineering portfolio.

Market Expansion

Strategic focus remains on strengthening the offshore software services market, particularly in the North American region.

Market Share & Ranking

Not disclosed

🌍 External Factors

Industry Trends

The industry is shifting toward AI-driven delivery and digital transformation (Cloud, Cyber Security). CG-VAK is positioning itself to capture this shift through its expertise in Product Engineering.

Competitive Landscape

Competes with global IT service providers and specialized OPD firms.

Competitive Moat

The company's moat is built on longstanding expertise in Outsourced Product Development (OPD), which creates high switching costs for clients integrated into their engineering ecosystem. Sustainability depends on keeping pace with GenAI advancements.

Macro Economic Sensitivity

Highly sensitive to US GDP growth and corporate IT budget allocations due to 81% revenue exposure to North America.

Consumer Behavior

Clients are increasingly demanding integrated AI and analytics within their software products, shifting demand toward high-end engineering services.

Geopolitical Risks

Subject to international ramifications, changes in government regulations, and tax laws in the US and India.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with the Companies Act 2013, SEBI Listing Obligations, and Indian Accounting Standards (Ind AS).

Environmental Compliance

The company has fully spent the required amount toward Corporate Social Responsibility (CSR) for the year.

Taxation Policy Impact

Effective tax rate for FY25 was approximately 26.6%, with current tax of INR 318.56 Lakhs on a Profit Before Tax of INR 1,197.78 Lakhs.

Legal Contingencies

The company has disclosed pending litigations in Note 23 of its financial statements; however, specific case values were not provided in the document snippets.

⚠️ Risk Analysis

Key Uncertainties

Rapid advances in GenAI present a risk of technology obsolescence for traditional software services, with a potential impact on margins if delivery efficiency is not improved.