Blue Cloud Soft. (539607)

FairStock Score: 52/100 — MIXED

Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Sales and profit growth are exceptional: 80.9% and 97.66% respectively.
• ROE of 61.07% and ROCE of 37.07% indicate an asset-light, capital-efficient business model.
• PEG of 0.30 suggests the P/E of 27.07 is inexpensive if current growth is sustainable.
• Piotroski F-Score of 7/9 points to adequate financial health across profitability and efficiency metrics.

Concerns

• P/B of 203.91 against book value of ₹1.15 means the price embeds an extremely high premium for net assets.
• The stock trades at ₹234.50, the top of its 52-week range of ₹16.51–₹234.50, leaving a very thin margin of safety.
• Latest quarter net profit of ₹19 Cr on sales of ₹265 Cr implies a thin net margin of about 7%.
• No dividend and promoter holding not disclosed; shareholders receive no cash yield and ownership transparency is unknown.

AI Analysis

When I see Blue Cloud Soft, I see a company growing at a pace most businesses only dream of. Sales up 80.9%, profits up 97.66%, and a PEG of 0.30 suggests the market is paying 27 times earnings for growth that, if sustained, is cheap. Graham would remind me, though, that 'if' is the key. Price has gone from ₹16.51 to ₹234.50 in 52 weeks. At ₹234.50, I am paying ₹203.91 for every rupee of book value—a book value of just ₹1.15. That leaves almost no margin for error. The business earns a remarkable 61.07% ROE and 37.07% ROCE, which points to a strong asset-light franchise, and a Piotroski score of 7 out of 9 indicates decent financial fundamentals. But the latest quarter shows ₹265 Cr in sales producing only ₹19 Cr in net profit—a thin net margin. There is no dividend, no promoter holding disclosed, and a mixed FairStock score of 52/100. I dream of buying great growers at reasonable prices. This is a fast grower with excellent momentum, but an asset-light business with a 200-plus price-to-book demands perfection. If growth slows or margins compress, the multiple unwinds violently. I would wait for more evidence, better margins, lower valuation, or clearer insider commitment. As Buffett says: 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.' But 'fair price' must include a pillow to sleep on. This price has ambition, not cushion.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer