Rs 225/Share Dividends, 3.44% Yield: Midcap Magic, Oracle Financial Gives 35% Return In 2 Day, Hits New High

IT stock in midcap basket, Oracle Financial Services Software gave as much as 30% returns to its investors in a single day. On January 18, this high dividend-paying stock didn't just touch a new 52-week high but also emerged as a top-performing stock on BSE and NSE when benchmarks Sensex and Nifty took a heavy beating from bears. The reason behind the upside in Oracle is its robust performance in Q3 for FY24. The consensus of analysts suggests a strong buy-in in Oracle!

On BSE, the stock price ended at Rs 6,545.30 apiece, up by Rs 1457.90 or 28.66% on Thursday. On this day, overall, the stock gained by Rs 1,526.35 or 30% to hit a new 52-week high of Rs 6,613.75 apiece.

Oracle shares have been in bullish trend for two-consecutive day now. From January 17-18, the stock climbed by Rs 1,701.6 or 34.64%.

From its 52-week low of Rs 2,987.40, Oracle shares have emerged as multi-bagger, skyrocketing by a whopping 121% on BSE.

Currently, the midcap has a market cap of Rs 56,705.52 crore. On the current market price, it has a dividend yield of 3.44%, one of the largest dividend yields in IT stocks.

In the last 12 months, Oracle has paid a whopping 4500% dividend amounting to Rs 225 per share. It holds a strong track record of rewarding its shareholders with dividend payouts for the last five years.

During Q3FY24, on a consolidated basis, revenue for the quarter was Rs. 1,824 Crore, up 26% year-over-year. Operating income for the quarter was Rs. 840 Crore, up 45% year-over-year. Net income for
the quarter was Rs. 741 Crore, up 69% year-over-year.

Further, in Q3FY24, on segment-wise performance, the Products business posted a revenue of Rs. 1,680 Crore, up 29% year-over-year, and operating income of Rs. 867 Crore, up 41% year-over-year. For the same period, the Services business posted a revenue of Rs. 144 Crore, down 2% year-over-year, and an operating income of Rs. 37 Crore, up 28% year-over-year.

Also, the company has signed license fees of $49.5 million during the quarter with customers in 37 countries.

Makarand Padalkar, Managing Director and Chief Executive Officer, Oracle Financial Services Software, said, "The results demonstrate our strength in all aspects. For the quarter, we posted strong growth in revenue and profits. Our license fee signings were US$ 49.5 million across our product lines for both Cloud/SaaS and on-premises deployment modes."

Padalkar added, "For the nine months ended December 2023, our license signings were US$ 117.4 million, 76% higher than the corresponding period last fiscal. We signed a landmark cloud deal with Navy Federal Credit Union, USA during the previous quarter, and we continue to see a robust deal pipeline across all the regions as we continue to serve the market with our product portfolio."

Oracle Financial Services Software is a world leader in providing products and services to the financial services industry and is a majority-owned subsidiary of Oracle Corporation.

As per Trendlyne data, the consensus recommendation from 1 analyst for Oracle Financial Services Software is STRONG BUY. Also, the company's EPS is expected to grow by 24.5% in FY24. It highlighted key positive factors for the stock price:

- Return on Equity(ROE) for the last financial year was 24.21%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit.

- Stock Price rose 110.15% and outperformed its sector by 72% in the past year.

The debt to debt-to-equity ratio is zero as the company is debt-free.

- Mutual Fund Holding increased by 1.16% in the last quarter to 4.94.

- Interest Coverage Ratio is 210.45, higher than 1.5. This means that it can meet its interest payments comfortably with its earnings (EBIT).

- Price to Earning Ratio is 26.52, lower than its sector PE ratio of 64.34.

- Promoter Pledges are zero.

Disclaimer: This just highlights the performance of the stock and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.