Protean eGov Technologies shares have hit a 52-week low of Rs 771.60. The stock has crashed 50% from its 52-week high levels, erasing thousands of crores of investor wealth. It had touched the 52-week high levels of Rs 1,535 on February 06, 2025. The stock price has corrected 65% from its all-time high of Rs 2,190.30, which it touched on August 30, 2024.
Protean eGov Tech: What led to the deep crash
First, the key reason the share price of Protean eGov Technologies was hammered was that the company lost a potential selection for the PAN 2.0 project in mid-May 2025. Why is it important? Protean eGov looked like a great digital monopoly as it was a no-risk play into services like PAN cards, e-KYC & e-governance.
This lost opportunity led to a fall of 14% in the stock price as soon as markets opened on 19 May 2025 and closed the trade at 20% lower circuit.
The company had a day before informed stock exchanges that it was not being considered for the next round of the Request for Proposals (RFP) selection process for the PAN 2.0 project by the Income Tax Department.
Protean eGov Tech: What the numbers reveal
Numbers at Protean are getting from bad to worse. The company has delivered poor sales growth of 6.83% CAGR over the past five years. In FY21, Protean eGov reported sales of Rs 603 crore, Rs 691 crore in FY22, Rs 741 crore in FY23, Rs 882 crore in FY24, and Rs 841 crore in FY25.
Its net profit over the seven years dropped to Rs 92 crore in FY25 from Rs 124 crore in FY19, a fall of 4.17% CAGR.
On the margin front, the operating margin shrank to 10% in FY25 from 23% in FY19, a 13% collapse. Even as fundamentals deteriorated, the stock was trading at a rich P/E of 33.97x, a recipe for disaster.
Protean eGov Tech’s price-to-book ratio of 3.31x and price-to-sales stands at 3.73x, both are high for a flat-growth business.
Additionally, the expenses have ballooned to Rs 760 crore in FY25 from Rs 578 crore in FY19, one of the key reasons behind shrinking margins. Also, dividend yield is just 1.19%.
Protean eGov Tech: Who holds how much?
As a result, smart money has moved out of the counter. Domestic Institutional Investors (DIIs) have also pared their stake to 24.75% as of June 2025 from 40.97% in March 2024. Similarly, the Foreign Institutional Investors (FIIs) have cut down their holdings to 8.8% in June 2025 from 10.90% in March 2025.
However, the public shareholding in Protean eGov shot up to 66.46% in June 2025 from 49.28% in March 2023, indicating that those who believed in the ‘monopoly’ narrative may be bearing the brunt of the sharp correction in the share prices.
Protean eGov Tech: Anand Rathi on the valuation play
The brokerage house Anand Rathi Wealth, in a research report on February 27, 2025, said that as the “exclusive provider of all four major digital identity services (e-sign, eKYC, Aadhaar authentication, and online PAN verification), it is well-positioned to capitalise on the high growth in the above (a 11% CAGR over FY22-24).”
The company operates primarily in three key business verticals: tax services, pension services and identity services. It has a leading 64% market share in tax services and 92% in pension services, including NPS and APY. Supported by favourable demographics, these categories have turned into a cash cow for the company, the brokerage added.
Anand Rathi Research valued Protean eGov at 45x FY27 P/E. “The valuation is justified on account of its good revenue growth, unique business model and sound processes and systems. The stock trades at 47x one-year forward P/E, below its mean P/E multiple of 60.92x,” said the brokerage house.
Protean eGov Tech lost its assumed monopoly in the PAN cards, e-KYC & e-governance space soon after the research report of Anand Rathi was published. LTI Mindtree was awarded the PAN 2.0 project by the Income-Tax Department.
Protean eGov Tech: Conclusion
All in all, in the given scenario, with the profitability suffering, margins under pressure and expenses spiralling up, it needs to be seen how long the business model can be labelled as a cash cow for Protean eGov Tech.