The company at CMP of 91 is looking an extremely lucrative BUY.
For the full year FY10 the company has posted an EPS of 26.88 Rs, which means it is trading at less than 3.5 PE. The company is trading below its book value of more than 100 Rs and has superior EBITDA Margins of around 53% and PAT margins close to 38%. ROCE is also fantastic at 20%.
To add to it, it enjoys zero tax rate for the next 3 yrs.
Moreover the Management is confident of delivering 22% in topline with margins maintained at the same level for the next yr.
Also compared to its peer set like sasken and bartronics it looks very cheap
The company has some solid products in its kitty like the
- Mundu Instant Messenger ( An integrated instant messenger that combines Yahoo, MSN and others)
- Mundu Radio ( It has been launched with Idea)
- Spokn ( VOIP application)
- Anti Piracy Software ( To stop online piracy of movies, the product has been tested for movie Houseful)
- Geoamida ( Worlds 1st integrated mobile handheld device)
- The company has also developed websites like the smartinvestor.in, edelweisiss.in and charts for moneycontrol.com
The best part is as an investor u can use and experience these products for yourself to check both the genuineness and ingenuious of them unlike many others.
The company has posted 644 crs of revenues and 248 crs of PAT for FY10, a tad below prev years earnings which were at 653 crs and 264.3 crs respectively due to pricing pressure.
However I feel its Anti Piracy Software and Geoamida are going to be revolutionary products and growth is imminent.
Some Other Points to keep in mind.
- The company has FCCBs to the tune of $111 M, which is the only debt.
- 95-98% of its sales is from export.
- The company is buying back shares to the tune of 5% for not more than Rs 150 per share.
Shareholding Pattern
Promoters =22.70
FIIs= 52.58%
Others=24.72.
A point of caution
The only niggling thing about this stock is that it has been battered continuously from levels of 150. This could be because of two reasons:- 1) Its 95 % sales are from exports and as we all know the situation in Europe and US looks grim. 2) The sentiment for all IT stocks is a bit negative.
However I feel that the stock has almost bottomed out and from here on, we can see a smart recovery.
