Tax Rate Analysis
The company's effective tax rate has been highly volatile and often deviates significantly from the statutory corporate tax rate of ~25-30% (including surcharges). For FY2026, the effective tax rate was `33.33%` (profit before tax of -1.74 Cr, tax of -0.58 Cr, net profit -2.32 Cr), but this is distorted by negative pre-tax income. In the latest quarter (Mar 2026), the tax rate was an anomalous `1300%` due to a minimal pre-tax loss of -0.02 Cr and a tax expense of 0.26 Cr. Similarly, in Mar 2025 quarter, the tax rate was `-800%` because of negative pre-tax profit and a tax benefit. Over the last two fiscal years, the company has reported net losses, making the tax rate calculation unreliable and not comparable to the statutory rate.Historical Context
In earlier profitable years, the tax rate was closer to the statutory rate: FY2024: `29.95%`, FY2023: `30.34%`, FY2022: `28.3%`. However, in recent periods (FY2025 and FY2026), the company has been loss-making, leading to erratic tax rates. For example, FY2025 had a negative effective tax rate of `-11.02%` due to a pre-tax loss of -1.18 Cr and a tax benefit of 0.13 Cr. This indicates that the company is not consistently paying taxes at the statutory rate because of its deteriorating profitability.Conclusion
The tax rate paid by Micropro Software Solutions Ltd is not close to the statutory corporate tax rate in recent periods due to sustained losses and negative pre-tax income. The effective tax rate is highly volatile and often negative or extremely high, reflecting the company's weak financial performance. Investors should view this as a warning sign of underlying business distress rather than a tax planning issue.
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The company's tax rate is erratic and far from the statutory rate due to consistent losses, indicating poor profitability. Long-term investors should be cautious as this reflects underlying business weakness.