TechNVision Ventures Ltd: Fundamental Analysis

The current section of the “Analysis” series covers TechNVision Ventures Ltd., an Indian software company that works in enterprise data management, enterprise cash flow management, and enterprise talent management.

Please note that to get maximum benefit from this article; an investor should focus on the analysis process instead of looking for good or bad aspects of the company. She should learn the interpretation of diverse types of data and transactions and pay attention to the parts of annual reports etc. used to get the information. This will help her in improving her stock analysis skills.

TechNVision Ventures Ltd: Detailed Fundamental Analysis

TechNVision Ventures Ltd has investments in various subsidiaries. As a result, TechNVision Ventures Ltd reports both standalone as well as consolidated financials.

Currently, the company has 6 subsidiaries including step-down subsidiaries (i.e. subsidiaries of subsidiaries):

1. SITI Corporation, USA
2. AccelForce Pte. Ltd., Singapore
3. Solix Technologies Inc., USA (Subsidiary of Accelforce., Singapore)
4. Emagia Corporation.,USA (Subsidiary of Accelforce., Singapore)
5. Solix Softech Private Limited. (Subsidiary of Solix Technologies Inc., USA)
6. 5Element Homes Private Limited

We believe that while analysing any company, an investor should always look at the company as a whole and focus on financials, which represent the business picture of the entire company including its subsidiaries, joint ventures etc. Consolidated financials of a company present such a picture. Therefore, if a company reports both standalone as well as consolidated financials, then the investor should prefer the analysis of the consolidated financials of the company.

As a result, while analysing the past financial performance of TechNVision Ventures Ltd, we have analysed its consolidated financials.

Further recommended reading: Standalone vs Consolidated Financials: A Complete Guide

With this background, let us analyse the financial performance of TechNVision Ventures Ltd.

Financial and Business Analysis of TechNVision Ventures Ltd:

In the last 10 years (FY2015-FY2024), the sales of TechNVision Ventures Ltd have increased at 21% year on year, from ₹34 cr in FY2015 to ₹193 cr in FY2024. In the 9 months of FY2025 (i.e. June 2024-Dec 2024), the company reported sales of ₹188 cr.

However, over the years, the operating profit margin (OPM) of TechNVision Ventures Ltd has been very volatile with frequently going into losses. The OPM was 8% in FY2015, which declined to operating losses in FY2018. The company again reported operating losses in FY2020. Thereafter, its OPM improved to 12% in FY2022; however, in FY2023, the OPM declined significantly to 1%. In FY2024, the OPM increased to 9%, but, again, in 9M-FY2025, the OPM declined sharply to 2%.

The net profit margin (NPM) of TechNVision Ventures Ltd has also shown similar sharp fluctuations. During most of the last 10 years, the company either reported losses or barely managed to report profits. The company reported losses for 3 consecutive years in FY2018, FY2019 and FY2020. Later, it reported profit margins of 10% in FY2022; however, again in FY2023 as well as 9M-FY2025, the company reported near 0 net profit margin.

The financial picture of the company’s historical performance presents more insights if an investor extends her analysis to the earliest available consolidated financial information from 2003 present in its historical annual reports available on the website of BSE Ltd from FY2000 onwards.

In the below table, we have presented the data of sales, net profits and net profit margin (NPM) for the last 23 years (FY2003-9M-FY2025) for TechNVision Ventures Ltd.

A look at the above data reveals that cumulatively, over the last 23 years, TechNVision Ventures Ltd has not made any profits. Over FY2003-9M-FY2025, it has reported a net loss of ₹6.4 cr. Once, it had a phase of 9 years of no growth from FY2005 (₹27.9 cr) to FY2013 (₹22.2 cr).

Its business performance has always been very volatile with frequent losses and whenever it reported good profits in a few years, then it followed up with poor years of nearly Nil profits. For example, in FY2023, it reported a net profit of only ₹0.2 cr on sales of ₹152 cr. Similarly, in 9M-FY2025, it reported a net profit of ₹0.9 cr on sales of ₹188 cr.

To understand more about TechNVision Ventures Ltd along with fluctuations in its profit margins, an investor needs to read the publicly available documents of the company like its annual reports from FY2000 and its corporate announcements submitted to stock exchanges.

In addition, an investor should also read the following article on conducting business analysis of companies active in the Information Technology industry:

The above-mentioned documents show that the following key factors have influenced the business of TechNVision Ventures Ltd, which are critical to understanding for any investor.

1) Surprising small value of intangible assets and a very large write-off of money spent on product development by TechNVision Ventures Ltd:

The company claims to be a software product company where it has products catering to data management (Solix Big Data Suite), cash flow management (Emagia Enterprise Receivable Management Suite) and talent management (SITI – Empowering Talent Management). In addition, TechNVision Ventures Ltd also claims to have a platform in residential properties’ space (5Element Homes).

For a software product company, an investor would assume that TechNVision Ventures Ltd would have a large amount of intangible assets reflecting intellectual property. However, the company does not seem to have any intangible assets either finished or under development or any goodwill.

FY2024 annual report, page 136:

TechNVision Ventures Ltd claims to have software of about ₹38 lac (i.e. ₹0.38 cr).

FY2024 annual report, page 151:

Moreover, in FY2022, the auditor of TechNVision Ventures Ltd certified in its report that the company does not have any intangible assets.

FY2022 annual report, page 82:

The company, during the year under consideration, did not own any intangible assets.

These findings seem strange considering the claims by TechNVision Ventures Ltd that its products are highly reputed and recognized by agencies like Gartner as the best (in the magic quadrant).

Emagia recognized as a Visionary for the 3rd Consecutive Year in the latest Gartner® Magic Quadrant™ (BSE corporate announcement, May 08, 2024)

FY2015 annual report, page 74:

There are four Leaders in this Magic Quadrant: IBM, Informatica, HP and Solix Technologies.

On analysing the annual reports of TechNVision Ventures Ltd, an investor notices that in FY2019, the company had written off almost ₹40 cr that it had spent on product/software development as a result, it had a negative carrying value of software.

FY2019 annual report, page 144:

In the cash flow statement in FY2019, the company clearly disclosed that it has written off product development value worth ₹41 cr.

FY2019 annual report, page 153:

An investor would appreciate that any company writes off its asset only when it realizes that the asset has no productive value and it will not be able to recover any money invested/spent on it in the future. It is effectively money wasted/down the drain.

So, an investor is surprised to find out why a software product company that claims to have highly effective solutions that are recognized by agencies like Gartner will write off its entire product development. It seems like a case where a company writes off “Symbian” or “Windows” mobile software entirely because nowadays only Android or iOS are the only relevant mobile operating systems.

An investor may contact the company directly to understand why it took a huge hit of about ₹40 cr on product development. What went wrong?

This becomes even more important when an investor realizes that the amount written off is about 4 times the entire profit of ₹9.5 cr earned by the company during all its profitable years from FY2003-FY2018 (i.e. excluding the losses of about ₹6.9 cr suffered by it in FY2005, FY2014 and FY2018).

So, in one sweeping step, the company wiped out more value than it had created in its entire history.

Also read: Why Management Assessment is the Most Critical Factor in Stock Investing?

2) TechNVision Ventures Ltd defaulted on repayment of loan:

During FY2014-FY2016, the company’s performance was highly suppressed. In FY2014, it made a loss of ₹3.2 cr, in FY2015, it made a profit of only ₹0.6 cr and in FY2016, it made a profit of only ₹0.4 cr.

As a result, TechNVision Ventures Ltd seems to have faced a severe financial crunch and it did not repay its loan to the Technology Development Board, India. Therefore, the lender had to accept a loss/haircut and offer a one-time settlement (OTS) to the company. It effectively meant that TechNVision Ventures Ltd had become bankrupt during this period.

FY2016 annual report, page 92:

3) Intense competition leading to the low pricing power of TechNVision Ventures Ltd:

The company operates in three segments: enterprise data management, enterprise cash flow management, and enterprise talent management. The company focuses primarily on exports and overseas revenue constitutes about 100% of sales.

FY2024 annual report, page 162:

Even in exports, its business is primarily focused on the US market.

FY2011 Annual report, page 28:

our revenues are highly dependent on clients who are primarily located in the US. the economic changes and other factors that affect the economic health of the US may affect our operations.

TechNVision Ventures Ltd faces strong competition from large established software companies like IBM, HP etc.

FY2024 annual report, page 74:

We face intense competition

FY2009 annual report, pages 15-16:

The market for our products and services is extremely competitive and subject to rapid change. While we offer comprehensive suite of Enterprise Data Management solutions and believe we are the technology leader, we compete with several large software companies such as IBM, HP & Informatics.

Due to intense competition from large established software providers, it seems that TechNVision Ventures Ltd is not able to price its products at a remunerative level. As a result, it has reported bare minimum profits and even losses in the past.

As recently as FY2025, the company reported a loss in Q2-FY2025 (loss of ₹2.58 cr) and H1-FY2025 (loss of ₹0.42 cr).

Despite operating in the fields of data management, cash flow management, and talent management for more than 15-20 years, still, the financial performance of the company does not indicate any sustained competitive advantage, which might have generated substantial profits for the company.

As a result, an investor should be very cautious in making future business projections for TechNVision Ventures Ltd.

Also read: How to do Business Analysis of a Company

4) Difficulties in collecting money from customers:

Over the years, TechNVision Ventures Ltd has had a very large amount of sales outstanding as receivables. It had receivables days of 276 days in FY2016. Even in FY2021 and FY2022, it had receivables days of 252 and 230 respectively.

An investor may look at it this way; in FY2022, it reported sales of ₹119 cr and out of it ₹88 cr were outstanding to be collected from customers.

Such high receivables days indicate the low negotiating power of TechNVision Ventures Ltd over its customers, which is also reflected in the fact that cumulatively over FY2003-9M-FY2025, the company lost money in its business and even faced bankruptcy where its lender had to offer it a one-time settlement.

Also read: Receivable Days: A Complete Guide

5) Very high trade payables of TechNVision Ventures Ltd:

Over the years, the company has reported very high trade payables. For example, during 3 years, FY2020 to FY2022, TechNVision Ventures Ltd disclosed that its consolidated trade payables increased from ₹27.6 cr in FY2020 to ₹34.6 cr in FY2021 to ₹52.8 cr in FY2022.

FY2022 annual report, page 123:

TechNvision Ventures Ltd trade payables FY2021-FY2022

The company highlighted to its shareholders that its major expenses are employee costs, travelling and marketing costs.

FY2024 annual report, page 73:

major cost components of any export oriented software industry are personnel, travelling and marketing costs

The below table shows all the expenses of TechNVision Ventures Ltd during the FY2020-FY2022 period.

An investor would notice that during FY2020 to FY2022, the only significant expense that has shown an increase is employee cost, which increased from ₹59 cr to ₹90 cr. There is no other expense that could lead to trade payables almost doubling from ₹27 cr in FY2020 to about ₹53 cr in FY2022.

One interpretation of such a rise of trade payables during this period is that the company was not able to pay salaries of its employees on time and it is pending/overdue salaries that are classified under trade payables.

This might represent another indication that due to the low pricing power; the company is not able to make sufficient money from selling its products to its customers and it faced difficulties in paying salaries.

An investor may directly contact TechNVision Ventures Ltd to get further clarity on the increase in trade payables by ₹26 cr during FY2020-FY2022 whereas the only expense that could have led to such an increase in payables is employee expenses.

Also read: How to study Annual Report of a Company

6) Very frequent press releases/announcements by TechNVision Ventures Ltd:

While going through the corporate announcements done by the company on stock exchanges, an investor notices that TechNVision Ventures Ltd frequently keeps on making stock exchange announcements on topics like opening of registrations for events, and announcement of speakers at events.

Below are some of the stock exchange announcements done by the company in FY2025 to BSE.

Registration Now Open For Solix’s SOLIXEmpower 2024 Conference, In Partnership With University Of California San Diego (July 31, 2024)

Solix Announces Industry Leaders Speaking at the SolixEmpower 2024 Conference at the University Of California SanDiego (September 24, 2024)

Solix ECS Is First to Deliver Affordable, Enterprise-Grade, Intelligent Document Management for Accounting and Finance Teams (July 1, 2024)

Solix Technologies, Inc. To Deliver Unsurpassed Data Governance, Privacy and Security with Third Generation Cloud Data Platform (October 28, 2024)

Emagia Recognized as a Major Player in IDC MarketScape Worldwide AR Automation Applications for the Enterprise 2024 (December 12, 2024)

Veena Gundavelli Earns Distinction as a member of The Software Report’s Top Al Executives of 2024 (May 14, 2024)

Emagia Named “Rising Star” in ISG’s 2024 Finance and Accounting Platforms Report (May 8, 2024)

Emagia to Showcase Autonomous Finance Platform at the 2024 Gartner@ CFO & Finance Executive Conference (May 17, 2024)

By looking at these announcements, an investor is intrigued; as to why a company that seems to produce such seemingly amazing software products has not made a cumulative profit over almost its entire life (FY2003-9M-FY2025).

When a company claims to have stellar software products that are highly recognized by market participants, then why does the company not have any significant intangible assets on its books?

We believe that when companies make very frequent and quick announcements about participation in events, new orders or memorandum of understanding (MoU), then an investor should be very cautious. This is because, in the past, there have been instances where companies influenced their share price by making positive corporate announcements, which later on, SEBI found to be false.

For example, take the case of Urja Global Ltd, which made fake announcements of supplying a fake mineral “Zacobite” to a Japanese company, Nippon Shinyaku Co Ltd. The announcement led to a sharp increase in the company’s share price. However, later on, SEBI found that all of it was fake. The Japanese company denied signing any contract with Urja Global. SEBI barred Urja Global Ltd and its executives from the market for 2 years (Sources: SEBI, CNBC TV18)

The top brass of Urja Global — now barred by SEBI from the markets — thought nothing of thinking up the non-existent Zacobite, which it was purportedly going to supply to Nippon Shinyaku Co Ltd. Simply put, Zacobite does not exist. Not on the Periodic Table, not even on a Google search. That’s right. The company decided to sell a product that does not exist.

Therefore, it is advised that investors should be very cautious while analysing corporate announcements made by companies and always cross-check the developments mentioned in these announcements from independent sources like customers, media and govt. authorities’ websites.

Over the years, the tax payout ratio of TechNVision Ventures Ltd has been highly fluctuating. This seems a combination of two major aspects. First, the company operates in exports of software, which receives significant tax concessions from the govt.

FY2011 annual report, page 79:

INCOME TAX: The Solix operations are covered under Software Technology Park (“STPs”) Scheme and the same is exempt for a period of 10 years

Second, the company has a history of reporting losses as well as miniscule profits, which lead to fluctuating tax payout ratio due to carry forward losses etc. and make tax payout ratio highly fluctuating whenever the company has to pay a tax.

Also read: How to do Financial Analysis of a Company

Operating Efficiency Analysis of TechNVision Ventures Ltd:

a) Net fixed asset turnover (NFAT) of TechNVision Ventures Ltd:

The company is a software company, which primarily deals in information technology products/services. As most of the business of the company is digital; therefore, net fixed asset turnover is not a highly relevant parameter to assess the operating efficiency of TechNVision Ventures Ltd.

Moreover, the auditor of the company has clarified that the company does not have any immovable assets.

FY2024 annual report, page 86:

the Company is not having any immovable properties

An investor may read more about asset turnover ratio and the cases where it is highly relevant in the following article: Asset Turnover Ratio: A Complete Guide for Investors

b) Inventory turnover ratio (ITR) of TechNVision Ventures Ltd:

As most of the products/services of the company are digital; therefore, it does not carry any inventory. As a result, the inventory turnover ratio (ITR) is not a highly relevant ratio for assessing its operating efficiency.

An investor may read more about inventory turnover ratio and the cases where it is highly relevant in the following article: Inventory Turnover Ratio: A Complete Guide

c) Analysis of receivables days of TechNVision Ventures Ltd:

As discussed earlier, the company has very high receivables days, which extended up to 250-270 days in the past. As a result, the company faced difficulties in collecting money from its customers and faced a liquidity crunch leading to a default in repayment to its lender resulting in a one-time settlement.

Recently, the receivables days of the company have improved to 97 days in FY2024.

Going ahead, an investor should watch the trend of receivables days of TechNVision Ventures Ltd to assess whether it is able to collect its receivables on time and avoid liquidity crunch.

Further recommended reading: Receivable Days: A Complete Guide

When an investor compares the cumulative net profit after tax (cPAT) and cumulative cash flow from operations (cCFO) of TechNVision Ventures Ltd for FY2015-FY2024, then she notices that over the years (FY2015-FY2024), the company is not able to convert its profit into cash flow from operations.

Over FY2015-24, TechNVision Ventures Ltd reported a total net loss of (₹12) cr. During the same period, it reported a cumulative cash flow from operations (cCFO) of ₹3 cr.

It is advised that investors should read the article on CFO calculation, which would help them understand the situations in which companies tend to have the CFO lower than their PAT. In addition, the investors would also understand the situations when the companies would have their CFO higher than PAT.

Further recommended reading: Understanding Cash Flow from Operations (CFO)

Learning from the article on CFO and the fund flow analysis over the last 10 years will show to an investor that the company had a higher CFO than its profits over FY2015-FY2024 due to of high depreciation of ₹50 cr, which primarily pertains to the write-off of product development of ₹41 cr, which was deducted while calculating PAT and is added back to PAT when calculating CFO.

The Margin of Safety in the Business of TechNVision Ventures Ltd:

a) Self-Sustainable Growth Rate (SSGR):

Read: Self Sustainable Growth Rate: a measure of Inherent Growth Potential of a Company

Upon reading the SSGR article, an investor would appreciate that if a company is growing at a rate equal to or less than the SSGR and it can convert its profits into cash flow from operations, then it would be able to fund its growth from its internal resources without the need of external sources of funds.

Conversely, if any company attempts to grow its sales at a rate higher than its SSGR, then its internal resources would not be sufficient to fund its growth aspirations. As a result, the company would have to rely on additional sources of funds like debt or equity dilution to meet the cash requirements to generate its target growth.

An investor may calculate the SSGR using the following formula:

SSGR = NFAT * NPM * (1-DPR) – Dep

Where,

• SSGR = Self Sustainable Growth Rate in %
• Dep = Depreciation rate as a % of net fixed assets
• NFAT = Net fixed asset turnover (Sales/average net fixed assets over the year)
• NPM = Net profit margin as % of sales
• DPR = Dividend paid as % of net profit after tax

(For systematic algebraic calculation of SSGR formula: Click Here)

An investor would notice that SSGR is highly dependent on NFAT, which is mainly relevant for companies whose revenues depend on fixed assets e.g. manufacturing companies. As TechNVision Ventures Ltd deals in digital products/services; therefore, its revenue is not dependent on its fixed assets. As a result, SSGR is not highly relevant for the assessment of TechNVision Ventures Ltd.

b) Free Cash Flow (FCF) Analysis of TechNVision Ventures Ltd:

While looking at the cash flow performance of TechNVision Ventures Ltd, an investor notices that during FY2015-FY2024, it generated a cash flow from operations of ₹3 cr. During the same period, it made a capital expenditure of about ₹13 cr.

Therefore, during this period (FY2015-FY2024), TechNVision Ventures Ltd had a negative free cash flow (FCF) of (₹10) cr (= 3 – 13).

In addition, during this period, the company had a non-operating income of ₹3 cr and an interest expense of ₹3 cr. As a result, the company had a total negative free cash flow of (₹10) cr (= -10 + 3 – 3). Please note that the capitalized interest is already factored in as a part of the capex deducted earlier.

To meet this cash shortfall, TechNVision Ventures Ltd used incremental debt. Over FY2015-FY2024, the company raised additional debt of ₹14 cr as its total debt increased from ₹10 cr in FY2015 to ₹24 cr in FY2024.

Going ahead, an investor should keep a close watch on the free cash flow generation by TechNVision Ventures Ltd to understand whether the company is able to generate surplus cash from its business or it keeps on relying on outside funds for growth.

Further recommended reading: Free Cash Flow: A Complete Guide to Understanding FCF

Self-Sustainable Growth Rate (SSGR) and free cash flow (FCF) are the main pillars of assessing the margin of safety in the business model of any company.

Further advised reading: 3 Simple Ways to Assess “Margin of Safety”: The Cornerstone of Stock Investing

Additional aspects of TechNVision Ventures Ltd:

On analysing TechNVision Ventures Ltd and after reading annual reports, credit rating reports and other public documents, an investor comes across certain other aspects of the company, which are important for any investor to know while making an investment decision.

1) Management Succession of TechNVision Ventures Ltd:

The company was originally named Ankur Agencies Ltd and in FY2000, Mr G Parameswara Rao and Mrs. G.P. Premalatha took over the control of the company and changed the name of the company to Solix Technologies Ltd. Subsequently, the name of the company was further changed to TechNVision Ventures Ltd in FY2012.

Mr G Parameswara Rao was the chairman of the company until FY2017 when he expired. Thereafter, his son, Mr. Sai Gundavelli became the chairman of the company.

Currently, three members of the promoter family, Mr. Sai Gundavelli (chairman, age 60 years) his wife, Mrs. Veena Gundavelli (managing director, age 55 years) and his sister, Mrs. Geetanjali Toopran (whole-time director & CFO, age 58 years)

An investor can get an idea of the relationship of all the promoters with each other from the FY2016 annual report, page 11 where the company has disclosed the relationship of directors with Mrs Geetanjali Toopran.

Relationship with other Directors, Manager and other Key Managerial Personnel of the company:

• Sri. G. Parameswara Rao (Daughter)
• Mr. Sai Gundavelli (Sister)
• Mrs. Veena Gundavelli (Sister-in-Law)

The succession of leadership in FY2017, upon the death of Mr G Parameswara Rao seemed smooth because three members of the next generation of the family were already working on the board of directors of the company. This presence of the next generation in the active role in the business when the founder promoter was still active was good succession planning.

However, currently, from the annual reports, it is not clear whether any member of the next generation of current promoters is active in the company.

An investor may contact TechNVision Ventures Ltd directly to understand whether the current promoters, Mr. Sai Gundavelli, Mrs. Veena Gundavelli and Mrs. Geetanjali Toopran have children and if yes, then are they playing any active role in the company. If not, then she may ask the company about the succession plan that promoters have in their mind.

The presence of a well-thought-out management succession plan is essential in the case of promoter-run businesses as it provides for a smooth transition of leadership over the generations and provides continuity in the business operations of any company.

Further advised reading: How to do Management Analysis of Companies?

2) Related party transactions of TechNVision Ventures Ltd with promoters and their entities:

Over the years, there have been many instances where the company has given money/loans to promoter entities.

For example, in FY2024, the company gave a total of ₹23 cr to its holding company, Tiebeam Technologies India Pvt. Ltd (TTIPL), which owns a 53.67% stake in the company. Out of this, ₹15 was given as an advance for the purchase of property and ₹8 cr was given as a loan.

FY2024 annual report, page 155:

In the H1-FY2025 results, the company disclosed that the advance for the purchase of property was given to Tiebeam Technologies India Pvt. Ltd has been received back.

H1-FY2025 results, page 3:

Such transactions of giving advance to the promoter entity for a short period and then taking it back might be to help the promoter entity meet any cash shortfall.

In fact, in the 2019 annual general meeting (AGM) when the company sought shareholders’ approval for giving loans/guarantees etc. to Tiebeam Technologies India Pvt. Ltd, then it stressed that the company is expected to support its group companies and is only honouring its obligations.

FY2019 annual report, page 15:

The Company is expected to render support for the business requirements of other companies in the group, from time to time…. Company in honouring its group company obligations, may be required to give loans, guarantee(s) and/or provide security (ies) in connection with any loan taken/ to be taken by TTIPL

An investor may note that even though the company/promoter may feel that it is its obligation to support group companies; however, such loans/guarantees and other related party transactions have the potential of shifting economic benefits from minority shareholders to promoters. Therefore, an investor should be extra cautious while assessing companies that enter into transactions with promoters’ related parties.

In the case of TechNVision Ventures Ltd, a look at the fund flow analysis for FY2024 indicates that in order to give ₹23 cr to the promoter entity (TTIPL), it had to take a loan of ₹14 cr. The company could have avoided taking a loan and moreover, even repaid its existing loan and saved interest cost if instead of giving money to the promoter entity, it had used this money to repay debt.

Also read: How Promoters benefit from Related Party Transactions

3) Declining stake of TechNVision Ventures Ltd in its step-down subsidiaries:

On March 31, 2024, the company had 3 direct subsidiaries and 3 step-down subsidiaries. All the direct subsidiaries of the company; Siti Corporation, US, Ccelforce Pte. Ltd, Singapore And 5element Homes Private Limited are 100% owned by TechNVision Ventures Ltd.

However, in the step-down subsidiaries, it does not have a 100% stake indicating that there are other investors who own a stake in these companies. On March 31, 2024, its stake in step-down subsidiaries was Solix Technologies Inc., US (58.21%), Solix Softech Private Limited (58.21%) and Emagia Corporation, US (63.15%) (FY2024 annual report, page 125).

Moreover, in FY2021, the stake of TechNVision Ventures Ltd in two of its step-down subsidiaries Solix Technologies Inc., US and Solix Softech Private Limited was higher at 68.37% i.e. in FY2022, the company diluted its stake in these step-subsidiaries by 10.26% from 68.37% to 58.21%. (FY2021 annual report, page 101).

As there are no details about who owns the remaining stake in these step-down subsidiaries and why TechNVision Ventures Ltd is diluting its stake in these companies; therefore, an investor may contact the company directly to understand the underlying reasons. She should ask the company whether it is promoters who own the remaining stake in these companies.

Also read: How to know if Promoters are Losing Commitment to the Company

4) Capital allocation by TechNVision Ventures Ltd:

Multiple decisions by the promoters/management indicate that capital allocation by the company has scope for improvement.

For example, as discussed earlier, in FY2019, the company wrote off about ₹41 cr of money spent on product development. This money is much more than the profits earned by the company over its entire life. An investor may believe that the promoters should have been cautious while spending money on software development and if there were signs that the product on which they are spending time and resources is going to be obsolete/irrelevant for market demand, then they should have taken the decision to stop developing it much earlier instead of spending such a large amount on it.

Even otherwise, an investor finds a large amount of money given by the company as “Other Current Assets”, which most of the time is completely unexplained without any description in the annual report.

During FY2024, the company reported that it had “Other Current Assets” of about ₹28 cr, which is an increase of about ₹18 cr over the “Other Current Assets” of about ₹10 cr in FY2023.

FY2024 annual report, page 152:

Additionally, by September 30, 2024, the Other Current Assets have increased further. In H1-FY2025 results, TechNVision Ventures Ltd has combined “Other Current Assets” and “Short-term Loans & Advances”, which increased from ₹44 cr on March 31, 2024, to ₹65 cr on September 30, 2024, i.e. additional ₹21 cr has been given out by the company.

H1-FY2025 results, page 3:

Moreover, the company has not provided any details about what these “Other Current Assets” are, which are consuming a large amount of money of shareholders.

An investor should be cautious while analysing such unexplained “Other Current Assets” when the company has to raise debt to give out money for such assets.

Also read: How to Identify if Management is Misallocating Capital

5) Weakness in internal controls & processes at TechNVision Ventures Ltd:

5.1) Nondisclosure of transactions in the related party transactions section of annual reports:

On multiple occasions in its annual reports, in financial statements, TechNVision Ventures Ltd disclosed that it has taken substantial liabilities from “Directors & their Relatives”; however, it did not disclose it in the “Related Party Disclosures”.

For example, in the FY2024 annual report, on page 153, the company disclosed that both in FY2023 as well as FY2024, it had liabilities from “Directors & their Relatives” of about ₹15 cr.

However, in the related party disclosures section on pages 155-156, the company did not disclose these liabilities in the outstanding balances.

5.2) Errors in annual reports:

At times, the data disclosed by the company in its annual reports contained errors, indicating that the maker-checker mechanism to verify important documents before they are published needs strengthening.

For example, in the FY2012 annual report, in consolidated financials, details of “Sales & Services” seem erroneous as the total of sales items does not reconcile with the data presented by the company. If an investor sums up the line items under sales & services, then she arrives at a total of ₹55,530,954 whereas TechNVision Ventures Ltd has disclosed a total of ₹290,996,174 in the annual report.

FY2012 annual report, page 92:

Similarly, in the FY2017 annual report, in the indebtedness table, the company made a totalling error. It showed total “Indebtedness at the beginning of the financial year as ₹20,400,010 whereas it should have been ₹28,328,014.

FY2017 annual report, page 33:

In FY2015, the company secretary, Mr Sulabh Mishra resigned from TechNVision Ventures Ltd. In the FY2014 annual report, on page 4, the company disclosed that Mr Mishra resigned on 8^th July 2014.

Mr. Sulabh Mishra, Company Secretary has resigned and left the Company on 8th July, 2014

Whereas in the FY2015 annual report, page 18, the company disclosed that Mr Mishra resigned on 11^th June 2014.

Mr. Sulabh Mishra, Company Secretary has resigned with effect from 11.06.2014.

In the FY2020 annual report, TechNVision Ventures Ltd disclosed different data for consolidated sales in different sections. On page 16, in the directors’ report, the company disclosed that in FY2020, it had consolidated total income of ₹12472.58 lakhs (i.e. ₹124.7 cr).

Whereas in the financial statements, on page 119, the company disclosed its total consolidated revenue/income of ₹759,474,854 (i.e. ₹75.9 cr).

In light of such errors in important documents like annual reports, it is advised that investors should be cautious while reading the data provided by TechNVision Ventures Ltd in its public filings.

Also read: How to study Annual Report of a Company

5.3) Lack of important details in annual reports:

On multiple occasions, TechNVision Ventures Ltd had refrained from providing important details about its financial data in its annual reports.

For example, in the FY2024 annual report, the company disclosed “Other liabilities” of ₹101 cr on March 31, 2024 and ₹66 cr on March 31, 2023. These are substantially large numbers considering the size of the company; however, TechNVision Ventures Ltd did not provide any further details about these liabilities.

FY2024 annual report, page 154:

In previous years as well, the company has not disclosed details about such liabilities.

Similarly, under employee expenses, which is the biggest expense for TechNVision Ventures Ltd, the company has classified large amount of expenses as “Other Expenses” without providing any clarity about what these are. For example, in FY2024, the company had “Other Expenses” of ₹27.5 cr under employee expenses, which is a very significant amount considering the size of the company. However, due to a lack of any details, an investor is left in the dark about what these ₹27.5 cr worth of expenses might be.

FY2014 annual report, page 154:

In previous years as well, the company has not disclosed any details about these “Other Expenses”.

In the FY2018 annual report, in the consolidated financials, out of total revenue of ₹50 cr, revenue of ₹43.6 cr was from companies whose financials were not audited. Due to the lack of audited financials for these companies, the auditor had to rely on the “Unaudited” financials and then prepare its report.

FY2018 annual report, page 116:

We did not audit the financial statements of the subsidiaries whose financial statements reflects…total revenue of ₹ 436,057,966/- …we have relied on the unaudited financial statements of the subsidiaries

In light of the above, investors should be extra cautious and increase their level of due diligence while analysing TechNVision Ventures Ltd.

The Margin of Safety in the Market Price of TechNVision Ventures Ltd:

Currently (March 4, 2025), TechNVision Ventures Ltd is available at a price-to-earnings (PE) ratio of about 326 based on consolidated earnings of the last 12 months ended December 31, 2024 (i.e. Jan. 2024-Dec. 2024). An investor would appreciate that a PE ratio of 326 does not offer any margin of safety in the purchase price as described by Benjamin Graham in his book The Intelligent Investor.

We recommend that an investor read the following articles to assess the PE ratio to be paid for any stock, which considers the strength of the business model of the company as well. The strength in the business model of any company is measured by way of its self-sustainable growth rate and the free cash flow generating the ability of the company.

In the absence of any strength in the business model of the company, even a low PE ratio of the company’s stock may be a sign of a value trap where instead of being a bargain; the low valuation of the stock price may represent the poor business dynamics of the company.

Analysis Summary

Overall, TechNVision Ventures Ltd has grown its business at a fast pace of 21% year on year over the last 10 years (FY2015-FY2024). However, this fast growth has come with its own challenges. A detailed analysis of TechNVision Ventures Ltd. raises several concerns and red flags that investors should be aware of.

The company has faced volatile operating and net profit margins, with frequent losses. Cumulatively, over the past 23 years, it has reported a net loss of ₹6.4 cr. During FY2014-FY2016, the company also defaulted on loan repayments to the Technology Development Board, India, which resulted in a one-time settlement, indicating a period of near bankruptcy.

Moreover, in FY2019, TechNVision Ventures Ltd wrote off approximately ₹40 cr in product/software development, despite its claims of having reputable software products. An investor is intrigued that despite having such reputed products, the company does not have any significant intangible assets.

The company faces strong competition from established software companies, which impacts its pricing power and profitability. Despite operating in its fields for 15-20 years, the company’s financial performance does not reflect a sustained competitive advantage. TechNVision Ventures Ltd has also struggled with collecting money from customers, as indicated by high receivable days, and has very high trade payables, potentially indicating difficulties in paying employee salaries on time.

TechNVision Ventures Ltd makes frequent stock exchange announcements about minor developments like participation in events and opening up of registrations etc. An investor should be careful as these might be a tactic to influence the share price.

The company has given money/loans to promoter entities, which raises concerns about potential shifts of economic benefits from minority shareholders to promoters. Moreover, TechNVision Ventures Ltd has been diluting its stake in step-down subsidiaries, for which it has not provided any details.

An investor also notices questionable capital allocation decisions, such as the write-off of product development costs and unexplained “Other Current Assets”. In addition, the company also has weaknesses in internal controls and processes, including non-disclosure of transactions, errors in annual reports, and a lack of important details in financial disclosures.

Going ahead, an investor should keep a close watch on the profit margins of the company to assess whether it gains any pricing/negotiating power over its counterparties. She should check its free cash flows to assess whether it is able to generate surplus cash in future.

The investor should closely monitor its transactions with promoters and their group entities as these have the potential to shift economic benefits from minority shareholders to promoters. She should also monitor the trend of the company’s shareholding in its subsidiaries. She should contact the company directly, in case, she notices discrepancies in the public disclosures done by the company.

Further recommended reading: How to Monitor Stocks in your Portfolio

These are our views on TechNVision Ventures Ltd. However, investors should do their own analysis before making any investment-related decisions about the company.

You may use the following steps to analyse the company: “Selecting Top Stocks to Buy – A Step by Step Process of Finding Multibagger Stocks”

I hope it helps!

Regards,
Dr Vijay Malik

P.S.

Disclaimer

Registration status with SEBI:

I am registered with SEBI as a research analyst.

Details of financial interest in the Subject Company:

I do not own stocks of the companies mentioned above in my portfolio at the date of writing this article.