IT stock crashes after shutting down UAE subsidiary to enhance operations in the Gulf region

During Friday’s trading session, the shares of an India-based software service provider primarily delivering software validation and verification services to the BFSI industry fell nearly 3 percent on BSE, after the company announced the dissolution of a UAE-based subsidiary.

Price Movement

With a market capitalisation of Rs. 1,249.4 crores, at 10:41 a.m., the shares of Expleo Solutions Limited were trading in the red at Rs. 805.05, down by nearly 2.1 percent, as against its previous closing price of Rs. 822.1. The stock has delivered negative returns of around 38 percent in one year, as well as declined by over 10 percent in one month.

What’s the News

As per the latest regulatory filings, Expleo Solutions FZE, UAE—a wholly-owned subsidiary of Expleo Solutions Limited—has been officially closed following the completion of all regulatory requirements.

The company’s Board approved the proposal for the closure of Expleo Solutions FZE during its meeting held on 23rd May 2024. Subsequently, upon completing all necessary formalities, the company received an official closure confirmation from the relevant authority on 3rd April 2025.

Reasons for Closure

Expleo Solutions FZE, UAE, was located in the Free Zone, Sharjah, UAE, which posed operational difficulties for the company, particularly in reaching clients across various industries throughout the Gulf region. Due to these constraints, the location was deemed less suitable for the company’s business objectives.

To better serve its customers across different industries in the Gulf region, the Board has decided to open a new wholly-owned subsidiary in Dubai, UAE. This strategic move is expected to bring in new business opportunities, improve operational efficiency, and strengthen the company’s presence and marketability across the Gulf countries.

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Financial Performance

Expleo Solutions reported a marginal growth in the revenue from operations, experiencing a rise of nearly 3.2 percent YoY, increasing from Rs. 250 crores in Q3 FY24 to Rs. 258 crores in Q3 FY25.

However, during the same period, the company’s net profit decreased from Rs. 34 crores to Rs. 19.8 crores, representing a decline of around 42 percent YoY. Between FY21 and FY24, the company’s revenue from operations grew at a CAGR of 47 percent, while net profit surged at a CAGR of nearly 22 percent.

Key Financial Ratios

In terms of key financial metrics, Expleo Solutions has a Return on Equity (RoE) of 15.9 percent and a return on capital employed (RoCE) of 20.5 percent. Additionally, the company’s debt-to-equity ratio stands at 0.05.

About the Company

Incorporated in 1998, Expleo Solutions Limited is engaged in the business of providing software services which involve primarily delivering software validation and verification services to the banking, financial services and insurance industry worldwide.

The company launched its Initial Public Offering (IPO) on 24th September 2009 (issue open date), and the allotment of shares under the IPO took place on 14th October 2009. Subsequently, the company’s shares were listed on the NSE and BSE with effect from 26th October 2009.

Written by Shivani Singh

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