SoftTech Engineers Ltd

I recently attended the AGM of SoftTech Engineers Ltd and following is a short writeup.

SoftTech Engineers Ltd is a product based software company based out of Pune engaged in the field of Architecture, Engineering and Construction Domain. It has a tremendous market share in the Automated Building Permit process through its product AutoDCR ( its investor presentation says 80%). However, there is another Bangalore based co which has a similar product but so far nothing compared to the reach and scale of AutoDCR.

SoftTech was formed in 1997 but was listed recently. Early on in its history it successfully developed and sold Struds (Structural Analysis Design and Detailing Software) and ESRGSR ( Structural Design for Water Tanks) to CSC, UK. CSC was taken over by Trimble, A US-based co based out of California. Trimble is popular for acquiring Sketchup from Google in 2012.

While AutoDCR is well known in the domain, a few months back its name came in the limelight when Ex Mah CM , Mr Devendra Phadnavis mentioned AutoDCR in a discussion.

Without the AutoDCR report building permits cannot be issued. The AutoDCR report is mandatory for the issuance of building permits in local bodies which have AutoDCR installed. Though there is a rule for manual scrutiny. Manual scrutiny takes about 200 manhours and only if there is a serious issue.

In 2019 AutoDCR contributed to 58% of its revenue.

Besides AutoDCR it has several other products chief amongst them are OPTICON ( Its ERP solution) and PWIMS ( Process management for Public Works Departments) which contribute to 6% and 28% of its 2019 revenue. Revenue from other products that are not its own forms 8% ( these primarily come from selling AEC domain products like AutoCAD etc)

Its other products include BIMDCR, Rule Buddy (which is in beta) and IBPS (a collaborative platform for Smart Cities). While PWIMS is doing well, Its thrust area is BIMDCR which they launched in Dec-17 (3D Building Information Model based Automation of Building Permits) as opposed to AutoDCR which is 2D based CAD process.

Existing AutoDCR clients can seamlessly transition to BIMDCR like MCGM (Municipal Corporation of Greater Mumbai), DOITC (Department of Information Technology and Communication) Govt. of Rajasthan and APCRDA (Andhra Pradesh Capital Region Development Authority) for implementing BIMDCR.

In the AGM the co mentioned its desire to expand the products outside India esp in the Asia Pacific and US market. In the sidelines post the AGM its CFO mentioned that even advanced nations like US, the building permits are done offline which was surprising. They have gotten into an agreement with Sputnik Consulting Sdn Bhd, Malaysia in 2019 to sell its products.

The other change happening is in the underlying revenue model of the co. Since a large % of its clients are local government bodies ( Public Works dept and Urban Local bodies), the co is making efforts to transition from a transaction-based to a direct revenue model. The co recently won a contract from UP local body where the money charged for approving building permits will be directly credited into its account instead of the earlier system of collecting from the govt which is the cause for the receivables. This transition can mitigate the issues that it faces in collecting from govt. The mgt was frank enough to admit the receivables issue in the AGM.

The other trigger is that recently RIB ITWO Software Private Limited agreed to advance 14Cr as an optionally convertible loan to SoftTech. RIB Software is a German MNC which provides BIM solutions globally. The terms of the agreement provide for issuance of equity shares upto 10% of the equity in case conversion takes place. For a small co like SoftTech it is interesting to see a German co in the AEC domain advancing a large loan with an intent to convert into equity. In 2018, the R&D exp of Rib Software was 21% of topline with 395 employees out of 1038 engaged in R&D. Its a profitable co with a Net Margin of 16% and EBITDA margin of 28% in 2018.

As far financials are concerned, the co has a net margin of ~12% and an EBITDA margin of ~25% in 2019 with an ROE b/w 12-13%. Its debt will now increase by 14cr post necessary approvals are taken. Its 2019 D/E ratio was 0.21. Receivables formed 17% of its topline in 2019.

H2’2019 v/s H2’2018 results have shown that topline declined by ~9% and due to the fixed cost structure of the co earnings before tax declined by 50%+. However, the co hasn’t yet posted the reasons for decline in topline and my understanding at this point suggests that it maybe due to some seasonal effects in building permits issuance.

Some of the risks i could identify are

  1. Cyclical nature of the real estate business will impact its topline
  2. Collections from govt can be a problem
  3. Too many products in the pipeline and more focus on product engineering than marketing and sales.
  4. If AutoDCR has too many error reports, the scrutiny can be offline. It happened in Nasik where builder body was dissatified with AutoDCR error reports and matter was escalated.

Views Invited

Disc : Invested


Thanks for note.
a) Do you know what is the business model? Is each building/architecture permission base they get commission, license fee or one time product sell?

b) Who are the competitors? And their strengths?


Hi @bkasal

The business model is straightforward. The urban local body or the public works department either buys their software outright and gets into a maintenance contract for a few years or ,

the software is installed and revenue is generated based on the sqft scrutinized by the software

Because it’s a govt organisation, the process is through a tender and bids.

To my knowledge , there is 1 competitor for the autodcr software (a Bangalore based co) - for products like opticon and pwims there are probably many. However, once the software is installed in the govt offices and officers are trained on it - it’s difficult for competitors to get in. Autodcr was an early mover and that’s why it has such a big presence. In Pune, we have an AutoDCR desk in Pune Municipal corporation esp for troubleshooting AutoDCR issues and uploading files.

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Translated Version:

RIB Software SE invests in SoftTech Engineers Limited, a worldwide leading provider of software for building permit automation.

Stuttgart and Hong Kong, November 6, 2019. RIB Software SE, the worldwide Leading Provider of iTWO 4.0 Cloud Enterprise Platform Technology for the construction and infrastructure industry, today announced the successful signing a convertible bond agreement with SoftTech Engineers Limited, a listed software companies on the National Stock Exchange of India,
known. Under the agreement, RIB SoftTech grants a loan from up to $ 2 million with the right to do so within the next 18 months to convert shares.

With this agreement, RIB underlines its commitment to its goal of 2 million users for the MTWO platform and the iTWO 4.0 technology.
softTech is the twelveth of 14 M & A transactions in the RIB Group plans this year, and thus the fourth, which in India, the country with the second largest population in the world, was carried out in no time. The SoftTech investment follows RIB Group’s investments in Levtech,
winjit and Capricot in 2019, consolidating their market position in the market Asia-Pacific as one of the leading providers in the AEC segment
(Architecture, Engineering & Construction) Automation.

The peculiarity of SoftTech is that it is one of the most profound differentiated AEC automation companies worldwide. By the Provision of an automated management system for building permits. As a precursor to BIM, the software reduces costs and time for architects and government agencies in the creation of
building regulations and the granting of building permits in an effective way and Wise. The integration of Auto (2D) and BIM (3D) Development Control Rules (DCR), also known as Building Regulations, is in the pre-construction phase a huge challenge to eliminate manual operations that from SoftTech Engineers Limited with offices in the US and Finland
and over 550 employees in India is realized.

In addition to its core offering, SoftTech also sells PWIMS (Public Works Information Management System) - an ERP for government-led Municipal enterprises, again called OPTICON for the Private sector (ERP for general contractors & builders / promoters)
is offered. SoftTech is currently working on “Rule Buddy” - one algorithmic software for mapping building codes based on Machine Learning & Deep Learning Approaches (AI). With 80% market share in the State agencies in India, SoftTech strives to improve its business model
in Virginia (USA) to replicate with the federal government there and at the same time in Helsinki (Finland) innovative solutions
develop. Founder and CEO - Vijay Gupta, is an engineer by technological innovations. SoftTech is headquartered in Pune, India and is an addition to the AEC segment for the public sector or authorities within the RIB Group.

SoftTech’s proprietary software solutions process 2D or 3D
3D CAD drawings and BIM files and arrange them automatically statutory building regulations. The company has been operating for five years
Continuously EBITDA margins of over 20%, based on an annual double-digit, average sales growth.

With several innovative cloud and machine learning offerings as well There is ample growth potential for its products in India and abroad
SoftTech will be able to move from India’s plan to developing more than 100 Smart cities and the global push for digitization and
Automation of building permit procedures to benefit. The existing one In the future, 20,000 user bases should be provided by new products and a speedy one international expansion.

The agreement reaffirms RIB and SoftTech’s shared commitment for digital transformation in the AEC industry. The two companies
will join their activities to the innovations of the 21st century for construction and building permits. RIB is on the board of
SoftTech to drive strategic direction.

This mutual synergy will enable SoftTech to become a global one Building a presence for government-led construction automation,
economies of scale and earnings per share to increase. At the same time, RIB gains a significant competitive advantage by having a
unique product in the MTWO / iTWO portfolio on a global scale is integrated.

Vijay Gupta, Chairman and CEO - SoftTech Engineers Limited: "Since the Founding of SoftTech more than 20 years ago, we work on the Transformation of the AEC industry. With RIB we become part of a bigger one Organization that helps us achieve our strategic goal of
international expansion and the expansion of our user base will support. Our existing and future products are intelligent, cloud-based and collaborative and therefore fit perfectly into the
MTWO platform strategy from RIB. "

Tom Wolf, CEO - RIB Software SE: "Automation and digitization Building Permits are a great opportunity for the AEC industry to Increase efficiency and speed of implementation. With our
iTWO technology, we consider the construction process holistic and are delighted to have found an innovative partner with SoftTech
is able to digitally render 2D or 3D CAD based drawings Implement building permits. The solutions from SoftTech are important
Building blocks in our MTWO platform strategy to deliver innovative SaaS solutions
for our customers. "

About the RIB Group

RIB Software SE is a pioneer in construction. The enterprise designs, develops and distributes state-of-the-art digital technologies for
Construction companies and projects of various industries all over the world.
iTWO 4.0, the modern cloud-based platform from RIB, offers the worldwide First enterprise cloud technology based on 5D BIM with AI integration for construction companies, industrial companies, developers and promoters, etc.
With over 50 years of experience in the construction industry, the RIB focuses
Software SE on IT and construction planning and is through exploration and Providing new ways of thinking and working and new technologies
Pioneering innovation in construction to increase productivity. The rIB is headquartered in Stuttgart, Germany, and Hong Kong, China, and
has been listed on the Prime Standard of the Frankfurt Stock Exchange since 2011.
RIB targets more than 1,500 employees at more than 30 locations worldwide from the construction industry in the most advanced and strongest transforming the digitalized industry of the 21st century.

About SoftTech Engineers Limited

SoftTech was founded in 1996 and supports the transformation of Company through software products and solutions based on sound
Industry know-how based. Over the years, SEL has been leading Industry Solutions in Architecture, Engineering and Construction (AEC) used to create added value for companies. The solutions were designed to be the sustainable competitive advantage of companies through to expand and improve stable conditions that are positive
affect all business critical factors. SEL improved and constantly pushes its first-class solutions through targeted, proactive market research and development. SEL, headquartered in Pune,
India, and over 550 employees, is the leader in management systems for building permits for the government sector in India

SoftTech Government Solutions, Inc. is the newest member of SoftTech Group. SoftTech Government Solutions uses advanced technologies to provide solutions for architectural, engineering and
construction projects and the management of public works projects for the
US public sector. Soft Tech Government
Solutions serves in particular the US federal market, the state governments as well as the local authorities and municipalities, to the building permit and optimize building processes. SoftTech Finland Oy in Helsinki is Innovation center for the development of KI & Machine Learning products.


The Maharashtra Govt had also published a notice in March 2019 for replacing the myriad DCR (Development Control Rules) in Maharashtra with a set of Unified DCR applicable across the state (cept Mumbai). If and when sanctioned, these rules will vastly improve the online building approval process and significantly reduce the implementation costs of AutoDCR team. One can read the notice here (its in Marathi and English)

On a different note, work by the SoftTech team to develop the OBPAS (Online Building Plan Approval System) of the UP govt seems to be also progressing well judging by the website. Earlier during the year SoftTech had won the contract to develop and maintain the OBPAS for the UP govt on the BOO model. This was its first contract where payments will be collected online directly from applicants on the basis of per square meter of approved carpet area of
buildings. Revenues from this are expected in H2’2019 and onwards.

One can look at the OBPAS website here :



SoftTech Engineers corporate governance standard has been decent based on past track record, disclosures etc. IPO funds were utilised as stated in the RHP. They have Grant Thornton India as their statutory auditor. This is rare for such a small company listed in SME segment and provides reasonable confidence on their numbers.

During FY18 company achieved YOY sales growth of 10.33% and PAT growth of 38.15% with EBITDA margin close to 30%. During H1FY19 company achieved YOY sales growth of 43.47% and PAT growth of 63.24% with EBITDA margin close to 24.46%. During H2FY19 company achieved YOY sales growth of 7.26% but PAT came down by 7.22%. EBITDA margin close to 25%. Overall in FY19 sales and PAT grew 21.76% and 14.72% respectively. During H1FY20 YOY sales and PAT came down by 8.86% and 27.35%.

The reason for below par performance in H2FY20 and decline in EBITDA margin from 30% earlier to 25% now could be attributed to

  1. High base effect of H1FY19

  2. Investment in overseas expansion and marketing expenses

  3. Increase in employee strength to cater to growing order book

  4. OBPAS implementation in UP but revenue yet to be registered

  5. Overall real estate market sentiment

Traditionally company does better in H2 compared to H1 as government departments are usually slow at the start of the financial year. This was mentioned in interviews at the time of IPO and again in above presentation at Alpha Ideas SME Stars meet. Also, they mentioned of achieving good growth in H2FY20. As they start getting their revenue directly from UP order onwards, receivables issue should be sorted out which is always a concern dealing with government agencies.

SoftTech Engineers is a market leader in the domestic market in its segment and growing steadily over the years. Overseas expansion will be a big positive if they succeed. They have already got few orders from UAE, Oman, Nigeria etc. and investment from RIB Software as their strategic partner will further facilitate their growth in overseas market.

The story looks quite good from medium to long term perspective.

Disclaimer: Invested

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SoftTech Project goes online

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Another implementation of autodcr likely to go live in Goa in jan’20. In the AGM , Mr Vijay Gupta has mentioned that Goa was a tough market to crack and they are working with the authorities to get autodcr implemented. The news seems to indicate that efforts have started paying off


Looks like the co has received its first tranche of loan from RIB ITWO (though it does not state the quantum). Also, Dominik Keller (A representative of RIB ITWO software) appointed as Nominee Director


What is the minimum number of shares one can buy.

I think one lot is of 1600 shares and you have to buy minimum 1 lot.

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Is it possible to obtain terms of investment?



hi all. some very good posts above. I had taken up this company after attending the SME meet in bombay. I agree and understand that AutoDCR has some amount of switching costs and has a valuable franchise with participation of many local municipalities. I had the following queries, which i had even sent to the management, but have not received any reply from the same. Sharing my list of questions here in case anyone can figure -

  1. Below are the Opticon revenues in INR crores over last 5 years –
Particulars 2015 2016 2017 2018 2019
Opticon revenues 4.24 1.85 0.63 4.16 3.87
Increase by -56% -66% 565% -7%

Could you please tell us the reason for decline in Opticon revenues in and 2016 2017 and their subsequent revival in 2018?

  • Could you help us understand the customer concentration among the top 5 players as a % of sales?

  • What does Others segment in revenues (INR 5.18 crores both in 2019 and 2018) include?

  • Product revenues component of total revenues has been going down from INR 14.4 Crores in 2013 to INR 5.3 Crores in 2019. Could you please tell us what these product revenues pertain to and why have they declined?

  • Details of bad debt of the company (in crores) are as follows –

Particulars 2015 2016 2017 2018 2019
Bad debts w/off during the year 0.8 0.9 1.2 0.9 1.2
as a % of average debtors o/s 4.9% 4.3% 5.1% 5.2% 5.7%
as a % of Sales 2.2% 2.0% 2.6% 1.8% 1.9%

With a large part of company’s sales being made to the local government bodies, could you help us understand the reasons for large bad debts?

  • Could you please tell us what the current outstanding order book size is and across the timeframe the same will be executed? In one of the previous annual reports, the same was mentioned as INR 186 crores.

  • Could you please let us know the life of a contract with a large local body like Pune (PMC)? Also, how does the contract duration change across AutoDCR, PWIMS and Opticon?

  • Post the completion of 3 years with respect to the order received from Municipal Department of Andhra Pradesh, is the company eligible to receive any sort of AMC from the PWIMS product? Also, it would be great if you could tell the margins that the company is targeting for this specific order.

  • From what we understand, SoftTech charges the local body based on the square foot analysed by AutoDCR. Is this correct? How is the revenue recognised for PWIMS?

  • Could you please let us know the approximate potential equity dilution post conversion by RIB Software SE of the convertible debentures?

thanks @bheeshma and everyone else for all your posts above.

have a nice day


Hi @bozo_investor

Good questions. I’ll try and answer some of them to the best of my knowledge. I have tried reaching out to the co but answers are sporadic at best.

On bad debts - its the nature of the biz and one will have to live with it. To mitigate this issue the are transitioning to a different revenue model with direct credit into their account. The co in its last AGM admitted that collections was a pain. The UP account is the first instance of this model

Opticon - as i understand is more for the overseas market rather than domestic esp geographies like MiddleEast, Africa etc. They are building up their overseas practice and hopefully with the recent RIB infusion and mgt one should see some traction on this front. In any case PWIMS and AutoDCR form 75% + of revenue

The Others / Products revenues are a low margin business line for e.g they sell Autocad etc to their clients. These are are a small part of their business and are sequentially coming down

In the 2019 AGM they had mentioned orders in hand of 80cr + addn 50 cr in the pipeline

Contracts are generally for 3 years after which they are renewed. Opticon doesnt have a contractual model however AutoDCR does. Dont know much about PWIMS but i think its same as AutoDCR.

Softtech charges revenue per sqft analysed. Rest i’ll try to figure out in the next AGM.

I think upto 10% of the debt extended by RIB Software is convnertible to equity. From the communication i have received the specific rate will depend on the SEBI rules

Do keep me posted if you have any additional info


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thanks @bheeshma for the detailed response. it is quite helpful.

another noteworthy point is that promoter has pledged 7% of his shareholding, while has been having miniscule transactions in his son’s name.
further, based on the 2019 AGM order book disclosure of 130 crores, it seems that the order book has been going down.

would connect further in case i come across anything else. waiting for their full year results.

Coming to the last point, as per my understanding 14 Cr of debt from RIB was supposed to get converted into equity for maximum 10% stake i.e. valuing the company at minimum market cap of 127 Cr as it will be additional equity.