Megasoft Limited (MEGASOFT) AI Stock Analysis

• Market Cap: ₹12.68B
• Dividend Yield: N/A
• Average Volume (3M): 37.41K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.83
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: IN
• Employees: 885
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.08
• Shares Outstanding: 73,770,040
• 10 Day Avg. Volume: 26,231
• 30 Day Avg. Volume: 37,409
• PEG Ratio: -0.09
• Price to Book (P/B): 2.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.07
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: ₹180.00 ▼(-13.23% Downside)

The score is held back primarily by weak financial performance—especially the severe revenue/profitability deterioration and large recent losses—despite positive recent operating/free cash flow and a still-solvent balance sheet. Technicals are a meaningful positive with price above key moving averages and supportive momentum indicators, while valuation appears modest on P/E but is tempered by weak earnings quality and no dividend support.

Positive Factors

Solvent balance sheet

Positive equity and a solvent balance sheet provide durable financial headroom, allowing the company to absorb continued operating losses, maintain supplier and creditor relationships, and pursue restructuring or product investments without immediate distress, supporting a multi-month turnaround window.

Positive operating and free cash flow

Recent positive operating and free cash flow indicate the business can generate cash despite accounting losses, which supports liquidity, funds working capital and selective reinvestment, and reduces near-term reliance on external financing — a durable support for recovery efforts.

Historical ability to produce profits

The company has demonstrated it can generate profitability in prior years, implying the underlying business model and cost structure can yield positive returns if revenues are restored. This track record makes a sustainable recovery operationally feasible rather than impossible.

Negative Factors

Severe revenue deterioration

Two consecutive annual periods of zero reported revenue represent a structural blow to the core business, eroding scale, customer relationships and pricing power. Without restored revenue, fixed costs and investment capacity will remain impaired, threatening long-term viability.

Negative gross profit and large net loss

Negative gross profit indicates costs exceed direct revenue generation, not just overhead issues, making margin recovery more difficult. A large net loss depletes retained earnings, limits reinvestment capacity and increases the need for external capital to fund any sustainable turnaround.

Rising leverage

Leverage increasing to roughly parity with equity reduces financial flexibility and raises refinancing and interest-rate risk, particularly with weak earnings. Higher debt constrains management's ability to invest in growth or weather prolonged revenue weakness over the next several months.

Megasoft Limited Business Overview & Revenue Model

Company Description

Sigma Advanced Systems Ltd. engages in the development, production, distribution and sale of chemicals and pharmaceuticals. It focuses on Pharma, Aerospace, and Defense Electronics areas. The company was founded by Gandarvakottai Venkataraman Kumar in 1994 and is headquartered in Hyderabad, India.

How the Company Makes Money

Megasoft Limited Financial Statement Overview

Summary

Overall fundamentals are mixed. The income statement is the key drag due to sharply deteriorating profitability, including zero reported revenue in the last two annual periods, negative gross profit, and a large net loss in 2025. The balance sheet remains solvent with positive equity but rising leverage and negative recent returns. Cash flow is a relative support with positive operating cash flow and free cash flow in 2025, though consistency has been uneven.

Income Statement

Profitability deteriorated sharply: the last two annual periods show zero reported revenue alongside negative gross profit and sizable operating losses, culminating in a large net loss in 2025. Results have been volatile (profit in 2022–2023, losses in 2024–2025), and the reported revenue trend indicates a severe contraction versus earlier years—raising concerns about business stability and earnings quality despite historically positive periods.

Balance Sheet

The balance sheet shows moderate asset backing and continued positive equity, but leverage has risen meaningfully, with debt now roughly in line with equity in 2025 (higher than prior years). Returns to shareholders have turned negative recently, reflecting losses and reduced balance-sheet efficiency. Overall, the company is not over-levered to an extreme, but the direction of leverage and negative returns are clear weaknesses.

Cash Flow

Cash generation is a relative bright spot: operating cash flow and free cash flow are positive in recent years, including 2025, supporting liquidity despite accounting losses. However, cash-flow strength is not fully consistent—coverage versus earnings has weakened recently and free cash flow has been negative in at least one earlier year—so durability and conversion quality remain key watch items.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.85B	0.00	0.00	19.71M	523.96M	594.02M
Gross Profit	1.82B	-44.66M	-1.99M	-18.93M	94.58M	273.70M
EBITDA	1.97B	311.29M	284.73M	251.10M	109.89M	100.79M
Net Income	1.23B	-299.37M	-127.47M	88.29M	46.21M	18.48M
Balance Sheet
Total Assets	0.00	3.64B	3.66B	3.77B	2.86B	3.17B
Cash, Cash Equivalents and Short-Term Investments	95.46M	95.46M	170.49M	22.86M	352.43M	67.68M
Total Debt	0.00	1.39B	1.47B	1.46B	290.32M	344.56M
Total Liabilities	-1.44B	2.21B	1.85B	1.84B	1.02B	1.76B
Stockholders Equity	1.44B	1.44B	1.81B	1.93B	1.85B	1.42B
Cash Flow
Free Cash Flow	0.00	194.75M	163.77M	136.85M	153.23M	165.30M
Operating Cash Flow	0.00	367.40M	275.63M	152.28M	164.74M	198.57M
Investing Cash Flow	0.00	-187.29M	97.23M	-1.33B	-100.52M	-32.94M
Financing Cash Flow	0.00	-258.90M	-174.48M	851.73M	220.53M	-156.31M

Megasoft Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MINDTECK	77 Outperform	₹7.24B	23.31	―	0.50%	0.23%	10.64%
INNOVANA	68 Neutral	₹7.05B	14.30	―	―	25.98%	18.29%
ONWARDTEC	62 Neutral	₹7.30B	16.09	―	1.84%	10.49%	69.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MEGASOFT	60 Neutral	₹12.68B	8.84	―	―	―	―
TRACXN	52 Neutral	₹3.76B	-35.22	―	―	―	―
SUBEXLTD	46 Neutral	₹5.25B	-102.25	―	―	-9.53%	96.99%

Megasoft Limited Corporate Events

Megasoft Reports Nil Activity Under SEBI-Mandated Special Window for Physical Share Transfers

Megasoft Limited has notified stock exchanges that, in line with a Securities and Exchange Board of India (SEBI) directive, it opened a special six‑month window from July 7, 2025 to January 6, 2026 for investors to re-lodge physical share transfer requests that were originally submitted before April 1, 2019 but were rejected, returned, or left unprocessed due to documentation or procedural deficiencies. According to a certification from its registrar and share transfer agent, Cameo Corporate Services, no requests were received, processed, approved, or rejected under this special window during the period, indicating that the regulatory compliance step has had no practical impact on Megasoft’s share transfer activity and suggesting that most shareholders have already transitioned away from legacy physical transfers.

Megasoft Limited Opens Special Window for Physical Share Transfers

Megasoft Limited has announced the opening of a special window for the re-lodgment of physical share transfer requests, applicable to deeds lodged before April 1, 2019, that were rejected or not processed due to documentation issues. This window, open from July 7, 2025, to January 6, 2026, aims to address past procedural lapses, although no requests have been processed during the period from July to November 2025, as reported by their Registrar and Share Transfer Agent.

Megasoft Limited Fined for Board Composition Non-Compliance

Megasoft Limited, a company listed on the BSE and NSE, has been fined for non-compliance with SEBI’s Regulation 17 regarding board composition. The company fell short of the required number of directors following a resignation. Megasoft is currently in the process of amalgamating with Sigma Advanced Systems Private Limited, which will include reconstituting its board to meet regulatory requirements. The fine, totaling Rs. 5,42,800, does not materially impact the company’s financials or operations, and Megasoft is taking steps to address the compliance issue.

Megasoft Limited Opens Special Window for Physical Share Transfer Requests

Megasoft Limited has announced the opening of a special window for the re-lodgment of transfer requests for physical shares. This initiative is targeted at transfer deeds lodged before April 1, 2019, which were previously rejected or not processed due to documentation issues. The window will be open for six months from July 7, 2025, to January 6, 2026, providing shareholders with an opportunity to rectify past deficiencies and complete their transfer requests. This move is expected to streamline share transfer processes and potentially improve shareholder satisfaction.

Megasoft Limited Announces Q2 2025 Financial Results

Megasoft Limited announced the approval of its unaudited financial results for the quarter and half year ending September 30, 2025, during a board meeting on November 8, 2025. The results, both standalone and consolidated, will be published in English and Tamil newspapers and made available on the company’s website and stock exchange platforms, reflecting the company’s commitment to transparency and regulatory compliance.