Blue Cloud Softech Shares Rise 3% on Auto Cybersecurity Chip Deal – Investors

Blue Cloud Softech Solutions saw its stock climb about 3% on Wednesday, reaching ₹25.20 after announcing a new partnership to build a security chip for modern cars.

New partnership for automotive security chips

The company signed a Memorandum of Understanding (MoU) with ConnectM Technology Solutions, a specialist in automotive electronics. Together they will create an EdgeAI System‑on‑Chip (SoC) that can detect and block cyber threats in vehicle modules such as telematics control units (TCUs) and vehicle control units (VCUs).

• Roles: Blue Cloud Softech will design the chip architecture and the AI‑based security features.
• Customization: The SoC will be tailored exclusively for ConnectM’s hardware platforms.
• Intellectual property: Blue Cloud Softech retains ownership of the core semiconductor and cybersecurity technology.
• Revenue sharing: After costs and taxes, net revenues will be split 50:50.
• Financial outlook: The partnership aims to generate around US$50 million in business from 2026 to 2030.

Why the deal matters for the company’s finances

The projected US$50 million revenue stream adds a significant upside to Blue Cloud Softech’s earnings outlook. The company reported a net profit of ₹15 crore for the quarter ending September, up from ₹11 crore in the previous quarter, while revenue rose to ₹253 crore.

After a steep decline of about 84% since its July 2024 high of ₹130.50, the stock has shown a modest recovery, gaining roughly 21% in December alone.

What investors should watch

• The partnership targets a growing market for cyber‑secure electric and connected vehicles.
• Revenue will depend on finalizing detailed agreements and successful chip commercialization.
• Share price volatility remains high; past performance shows large swings.

Keeping an eye on the rollout timeline of the EdgeAI SoC and any further financial updates from the joint venture will be crucial.

Takeaway

Blue Cloud Softech’s move into automotive cybersecurity could diversify its revenue base and give the stock a new catalyst. However, investors should balance the potential upside with the company’s recent price volatility.

Remember, this is perspective, not prediction. Do your own research or consult a qualified advisor before making any investment decisions.