TERASOFT - Tera Software

📊 NSE: TERASOFT 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/14/2025 14:17

💰 Financial Performance

Revenue Growth by Segment

For the half-year ended September 30, 2025, the Technical Division contributed INR 66.98 Cr, the Integrated Solutions Division contributed INR 37.19 Cr, and the Projects Division contributed INR 29.84 Cr. Total revenue for FY24 was INR 87.76 Cr, representing a 34.40% decline from the previous year due to election-related tender delays.

Geographic Revenue Split

Not disclosed in available documents; however, operations are heavily concentrated in Indian government projects such as BharatNet and APSFL.

Profitability Margins

The Net Profit ratio improved to 9% in FY25 from 5% in FY24, an 88.64% increase. The Operating Profit Margin ratio rose to 9% from 7%, a 38.64% improvement, driven by a rise in revenue from operations and a notable reduction in expenditure.

EBITDA Margin

EBITDA margin improved to 7.82% in FY24 and further to 11.26% in 1H FY25. The company expects a stabilized EBITDA margin of 10.00% for the full FY25 as it scales manpower and materials for new project executions.

Capital Expenditure

Not disclosed in absolute INR Cr for future periods, but the company is currently investing in enhanced manpower and materials to execute its INR 2,521.54 Cr order book.

Credit Rating & Borrowing

Infomerics assigned a rating of IVR BBB-/Stable for bank facilities including a INR 50.00 Cr Cash Credit limit. The Debt-Equity ratio improved by 45.29% (from 0.30 to 0.16) due to the repayment of long-term borrowings and clearing of cash credit.

⚙️ Operational Drivers

Raw Materials

Specific raw material names are not listed, but 'materials for projects' and 'technical manpower' are the primary cost drivers for the Integrated Solutions and Projects divisions.

Capacity Expansion

Current capacity is defined by a strong order book of INR 2,521.54 Cr, which is 29.85x the FY24 revenue. Expansion is focused on executing BharatNet Phase-III and smart metering projects.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but the company noted a 'notable reduction in expenditure' during FY25 which contributed to an 88.64% increase in the net profit ratio.

Manufacturing Efficiency

Not applicable as a manufacturing metric, but the Interest Coverage Ratio stood at 3.99x in FY25, and the Return on Equity (ROE) improved by 120.81% (from 0.03 to 0.08) due to increased operational efficiency.

📈 Strategic Growth

Expected Growth Rate

140%

Growth Strategy

Growth will be achieved through the execution of the INR 2,521.54 Cr order book, specifically targeting BharatNet Phase-III projects, expansion into smart metering, smart city expansion, and IT infrastructure management solutions.

Products & Services

Integrated IT solutions, technical services, project management for BharatNet, spot billing services, and IT infrastructure management.

Brand Portfolio

TERASOFT

New Products/Services

Entry into smart metering and smart city projects is expected to drive future revenue, though specific contribution percentages are not disclosed.

Market Expansion

Expansion is focused on large-scale digital transformation initiatives within India, specifically targeting public sector digital infrastructure.

🌍 External Factors

Industry Trends

The industry is shifting toward large-scale digital infrastructure (BharatNet) and smart utility management. TSL is positioned to capture this through its massive 29.85x revenue-to-order-book ratio.

Competitive Landscape

Faces increasing competition from large IT players and global firms in the government digital services space.

Competitive Moat

The moat is built on extensive promoter experience and a massive order book of INR 2,521.54 Cr, providing revenue visibility for several years, though it is constrained by high working capital needs.

Macro Economic Sensitivity

Highly sensitive to government budgetary constraints and public sector spending cycles.

Consumer Behavior

Not applicable as the primary customers are government and public sector enterprises.

Geopolitical Risks

Minimal direct geopolitical risk as operations are domestic, but sensitive to national regulatory and policy changes.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with Indian Accounting Standards (Ind AS) and SEBI (LODR) Regulations. Operations are subject to government tender regulations and BharatNet project standards.

Taxation Policy Impact

Not disclosed as a specific percentage, but the company accounts for deferred tax assets (INR 1.97 Cr as of Sept 2025).

Legal Contingencies

The company faces significant contingent liabilities of INR 103.00 Cr as of the end of FY24. It also dealt with a INR 33 Cr write-off of disputed receivables from APSFL where no writ petition was filed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the crystallization of INR 103.00 Cr in contingent liabilities and the recovery of disputed receivables, which could impact cash accruals.