On January 18, Oracle Financial Services Software, an IT stock in the midcap basket, delivered exceptional returns of 30% to investors in a single day. Despite the bearish trend in the market, Oracle not only touched a new 52-week high but also stood out as a top-performing stock on both BSE and NSE.
Oracle’s surge can be attributed to its robust performance in Q3 for FY24, making it a consensus “strong buy” among analysts.
Bullish Trend Continues:
Oracle’s bullish trend extended over two consecutive days, witnessing a climb of Rs 1,701.6 or 34.64% from January 17-18. The stock has shown an impressive growth of 121% from its 52-week low of Rs 2,987.40 on BSE, currently holding a market cap of Rs 56,705.52 crore.
Generous Dividends and Financial Highlights:
Oracle stands out with a substantial dividend yield of 3.44%, one of the highest among IT stocks. Over the last 12 months, it has distributed a remarkable 4500% dividend, amounting to Rs 225 per share. The company has a consistent track record of rewarding shareholders with dividends for the past five years.
Q3FY24 Financial Performance:
In Q3FY24, Oracle reported impressive consolidated figures:
- Revenue: Rs. 1,824 Crore, up 26% YoY
- Operating Income: Rs. 840 Crore, up 45% YoY
- Net Income: Rs. 741 Crore, up 69% YoY
Segment-wise Performance:
- Products business: Revenue of Rs. 1,680 Crore, up 29% YoY
- Services business: Revenue of Rs. 144 Crore, down 2% YoY
Fundamentals:
- Market Cap ₹ 60,983 Cr.
- Current Price ₹ 7,039
- High / Low ₹ 7,139 / 2,987
- Face Value₹ 5.00
- Book Value ₹ 750
- Dividend Yield 3.16 %
- Industry PE 38.7
- Stock P/E 28.6
- PEG Ratio 3.62
- Return over 1year 111 %
- ROCE 35.1 %
- ROE 24.8 %
- Sales growth 12.6 %
- Profit growth 18.2 %
- Profit Var 3Yrs 7.30 %
- Sales growth 3Years 5.44 %
- OPM 43.5 %
- Debt ₹ 53.8 Cr.
- Debt to equity 0.01
- Free Cash Flow ₹ 1,720 Cr.
- Int Coverage 134
- Cash Equivalents ₹ 4,406 Cr.
Key Positive Factors for Investors:
- Return on Equity (ROE) for the last financial year: 24.21%
- Stock Price Growth: 110.15%, outperforming the sector by 72% in the past year
- Debt-to-Equity Ratio: Zero, indicating a debt-free status
- Mutual Fund Holding: Increased by 1.16% in the last quarter to 4.94
- Interest Coverage Ratio: 210.45, comfortably meeting interest payments with earnings
- Price to Earning Ratio: 26.52, lower than sector PE ratio of 64.34
- Promoter Pledges: Zero
Global Recognition and Future Outlook:
Oracle Financial Services Software, a world leader in financial services products and services, is a majority-owned subsidiary of Oracle Corporation. The company has a consensus “strong buy” recommendation from analysts, and its EPS is expected to grow by 24.5% in FY24.
Expert Opinion and Outlook:
According to Trendlyne data, Oracle Financial Services Software is well-regarded by analysts, and the company’s solid financials indicate positive growth. With a strong Q3 performance and a robust deal pipeline, Oracle is poised for continued success in serving the market with its produc