Tera Software (TERASOFT)

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

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

At ₹349.55, Tera Software is not the kind of business Graham would flag as a statistical bargain. The P/E of 21.81 and P/B of 3.72 make the market pay up for future growth, not just for assets on the balance sheet. The good part is that the recent growth has been exceptional: sales up 147.55% and profits up 199.06%. A 17.52% ROE with a debt/equity ratio of only 0.22 shows management has used limited borrowings. The Piotroski score of 7/9 gives me confidence that the financials are improving rather than window-dressed. Promoter holding of 47.53% keeps their interests aligned with retail shareholders. But I must resist the temptation to extrapolate. In IT enabled services, a one-time project spurt or favourable base can produce such jumps, and the latest quarterly profit of ₹6 Cr is still small in absolute terms. The stock has already fallen from ₹598 to ₹349.55, which tells me volatility is real. With ROCE at 11.28%, the underlying operating return is modest; the high ROE owes something to leverage and unusual profit growth. At ₹448 Cr market cap and a dividend yield of 0.28%, this is a total shareholder return story dependent on growth continuing. Graham would want a margin of safety; 21.81 times earnings is not that margin. I would hold it in the "fast grower" bucket and watch whether the quarterly sales and profit trajectory continues. The PEG of 0.13 is only meaningful if the 199% profit growth persists, which is rare for any industry.

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