About The Company
The company has been in limelight for quite some time. It has been fairly fancied among the investor as a portfolio stock in the capital markets.
About The Results
Prism Cement having changed its accounting year to end with March ending instead of June had posted good results for quarter as well as period ended 31st March,09. This is the first audited results of FY 09 having posted by any company, even ahead of Infosys. Due to improved performance in Q3 , the company has declared a final dividend of 5%, which along with 10% interim having already paid, make it 15% for the period or 20% annualised, against 10% having paid last year.
The company posted a total income of Rs.245 crores in Q3 against Rs.218 crores of Q2 and Rs. 167 crores of Q1 while total for the period is at Rs.630 crores. PAT for Q3 stood at Rs. 50 cr. Against Rs. 31 cr. Of Q2 and Rs. 15 cr. of Q1. A rising trend on topline and bottomline. It is also heartening to note that on an EPS of Rs. 3.23 a dividend of Re.1.50 is being paid. Thanks to debt free status of the company. This is inspite of the fact that tax liability of the company for FY 09 has been at 40% against 26% of FY 08.
About the Stock
Share ruling at 27 has fully factored in the working for FY10 and would see its full value coming in at Rs.30.
We must wait for the fair value to arrive to make any fresh positions.
Wednesday, April 15, 2009
Firstsource Solutions - Multibagger
The present market capitalization of the company is at Rs 725 crore while the enterprise value is close to Rs 2,000 crore. With the repurchase of FCCB, the company would get vastly re-rated. Share now ruling around Rs 19 is witnessing huge volume, on expectations of stake sale. If that happens, it is likely to rise to Rs 30 per share, which is expected to be atleast the stake sale price.
Firstsource Solutions (FSL)Firstsource Solutions (FSL) is a global BPO company, providing services across the banking and financial services sector, telecom, media and healthcare industries. It provides services throughout the customer lifecycle, including customer acquisition, customer care, billing and collections, transaction processing and business research and analytics.
FSL has global clients with over 20 Fortune Global 500, Fortune 500 and FTSE 100 companies and includes over 800 leading hospitals in US, 3 of top 5 global healthcare insurance companies, 2 leading Indian mobile service providers, 2 of the world’s top 10 telecom companies and one of the largest Indian bank.
FSL acquired MedAssist Inc, the largest provider of revenue cycle management services to hospitals in USA. For acquiring this, FSL issued FCCB of US$ 275 million, which are due for redemption in Dec 2012 or convert at Rs 92.29 per share. As share price is ruling at Rs 17, conversion seems unlikely.
Due to the FCCB concern, share price has taken a beating and had its 52-week high/low of Rs 51/Rs 9.50. The share is now ruling at Rs 19.10.
The company has started buying back FCCB in March 2009 and had repurchased FCCB of US$ 49.70 million till date, which is commendable, as after this, the outstanding FCCB is just at US$ 225 million.
FSL, for the year ended 31/03/08 had a total income of Rs 1,334 crore with a PBT of Rs 143 crore and PAT of Rs 132 crore.
The present equity of the company is at Rs 428 crore, with face value of Rs 10 each. Of this, ICICI Bank, being the promoters, hold 26.74% while 50.77% is held by 4 OCBs and 7.04% by FIIs and Foreign Venture Capital Investors. This is thus leaving low float of about 15% with the public.
In the past, Warburg Pincus wanted to acquire the company and even ICICI Bank is keen to divest its stake and exit from the company at a proper price.
The company does not have much debt except the FCCB. As at 31/03/08, it had a total debt of Rs 1,225 crore with FCCB being at Rs 1,103 crore. However, the company has intangible assets of Rs 1,888 crore being Goodwill on various acquisitions but no write offs will be required as there is no impairment.
The present market capitalization of the company is at Rs 725 crore while the enterprise value is close to Rs 2,000 crore. With the repurchase of FCCB, the company would get vastly re-rated.
In case ICICI Bank, opts to sell, which is most likely, open offer for 20% would be made, resulting in 100% acceptance, as 4 OCBs holding 51% may not participate. In that case, share price will rise to stake sale price.
Share now ruling around Rs 19 is witnessing huge volume, on expectations of stake sale. If that happens, it is likely to rise to Rs 30 per share, which is expected to be atleast the stake sale price.
Considering all these factors, share qualifies as a risk free bet at Rs 19.10, which is likely to give close to 50% return in next six months.
Firstsource Solutions (FSL)Firstsource Solutions (FSL) is a global BPO company, providing services across the banking and financial services sector, telecom, media and healthcare industries. It provides services throughout the customer lifecycle, including customer acquisition, customer care, billing and collections, transaction processing and business research and analytics.
FSL has global clients with over 20 Fortune Global 500, Fortune 500 and FTSE 100 companies and includes over 800 leading hospitals in US, 3 of top 5 global healthcare insurance companies, 2 leading Indian mobile service providers, 2 of the world’s top 10 telecom companies and one of the largest Indian bank.
FSL acquired MedAssist Inc, the largest provider of revenue cycle management services to hospitals in USA. For acquiring this, FSL issued FCCB of US$ 275 million, which are due for redemption in Dec 2012 or convert at Rs 92.29 per share. As share price is ruling at Rs 17, conversion seems unlikely.
Due to the FCCB concern, share price has taken a beating and had its 52-week high/low of Rs 51/Rs 9.50. The share is now ruling at Rs 19.10.
The company has started buying back FCCB in March 2009 and had repurchased FCCB of US$ 49.70 million till date, which is commendable, as after this, the outstanding FCCB is just at US$ 225 million.
FSL, for the year ended 31/03/08 had a total income of Rs 1,334 crore with a PBT of Rs 143 crore and PAT of Rs 132 crore.
The present equity of the company is at Rs 428 crore, with face value of Rs 10 each. Of this, ICICI Bank, being the promoters, hold 26.74% while 50.77% is held by 4 OCBs and 7.04% by FIIs and Foreign Venture Capital Investors. This is thus leaving low float of about 15% with the public.
In the past, Warburg Pincus wanted to acquire the company and even ICICI Bank is keen to divest its stake and exit from the company at a proper price.
The company does not have much debt except the FCCB. As at 31/03/08, it had a total debt of Rs 1,225 crore with FCCB being at Rs 1,103 crore. However, the company has intangible assets of Rs 1,888 crore being Goodwill on various acquisitions but no write offs will be required as there is no impairment.
The present market capitalization of the company is at Rs 725 crore while the enterprise value is close to Rs 2,000 crore. With the repurchase of FCCB, the company would get vastly re-rated.
In case ICICI Bank, opts to sell, which is most likely, open offer for 20% would be made, resulting in 100% acceptance, as 4 OCBs holding 51% may not participate. In that case, share price will rise to stake sale price.
Share now ruling around Rs 19 is witnessing huge volume, on expectations of stake sale. If that happens, it is likely to rise to Rs 30 per share, which is expected to be atleast the stake sale price.
Considering all these factors, share qualifies as a risk free bet at Rs 19.10, which is likely to give close to 50% return in next six months.
JVL Agro Industries - Multibagger
With a massive scale up through expansion projects & acquisitions, and growth visibility in coming years, JVL Agro with revenues of Rs.1155 crores, expected EPS of Rs.50 for FY 09 and a market cap of Rs.58 crores looks undervalued, in an industry unlikely to go out of fashion.
JVL Agro Industries Ltd.JVL Agro Industries Ltd. was incorporated in 1989 under the name of Jhunjhunwala Vanaspati Limited. The company set up its unit at Jaunpur, close to Varanasi in the year 1990 with the production capacity of 25 tpd. From a 25 tdp capacity in 1990, the company has grown substantially and now claims to be India’s largest unit for manufacture of vanaspati with a capacity of 72,000 tpa at Jaunpur. The company besides Vanaspati now produces various Refined Oils and Mustard Oil and has recently diversified its business activities into fertilizers and other agro based products.
The company has its manufacturing facilities at Jaunpur, close to Varanasi and at Alwar, Rajasthan. The company has a capacity to produce 72,000 tpa of Vanaspati, 1,14,000 tpa Refined Oils and 81,000 tpa Mustard Oil.
The company sells its products under ‘Jhoola’ brand which commands a market share of 35% of the Uttar Pradesh vanaspati market, 23% share of Bihar, 5% of Jharkhand, 9% of Maharashtra, 6% of Madhya Pradesh and 8% of Gujarat. (Source : Company’s Annual Report March 08)
Expansion and Diversification Projects:
The company has undertaken various expansion and diversification projects which will add substantially to its scale of operations leading to higher revenues and profitability.
• Greenfield Project in Bihar - The Company has acquired around 10 acres at Dahri-on-sone in Bihar to set up a 750-tpd capacity refinery/vanaspati unit. The project is in the final stages of implementation and the first phase for 500 tpd is expected to go on stream in May 2009.
• Expansion at Varanasi Plant - The company has set up a new refinery at Varanasi with a capacity of 400 tpd which has gone on stream in December 2008. This has doubled the production capacity at its Varanasi plant. (from 72,000 tpa before the expansion.)
• Greenfield Project at Haldia - The Company has acquired around 8.5 acres at Haldia to set up a 1000-tpd capacity refinery. The project is under implementation and is expected to go on stream in 2010-11.
• Expansion Project at Alwar - The Company is setting up an edible oil refinery of 100 tpd at Alwar, Rajasthan, to manufacture refined and soybean oil.
• Acquisition of Fertilizer PSU - The Company acquired the assets and properties of 318-acres factory unit of M/s Pyrites Phosphates & Chemicals Limited (a PSU in liquidation) at Amjhore, Bihar, through auction to venture into fertilizers. The unit besides land of 318 acres also has captive pyrite mines, which is the main raw material for manufacture of sulphuric acid used for manufacture of Single Super Phosphate (SSP). The unit has over 250 acres of surplus land which can be utilised for expansion of the unit in future.
• Multi Services SEZ – The group had acquired a stake in Hari Fertilizers Ltd. located in Varanasi and plans to develop a 333 Acre SEZ on the land of Hari Fertilizers Ltd., for which the company has received State and Central Government approvals.
Investment Rationale:
JVL Agro is one of the most attractive proxies of India’s cooking media sector. The company possesses a product basket extending from vanaspati to various refined oils. With a market share of 35% in Uttar Pradesh and 23% in Bihar in Vanaspati, the company commands leadership position across two of India’s most densely populated states. The company has established a strong foothold in these markets, without spending much on advertising. The company has a brand that is visible, attractive and available; has a scale that is imposing and economical and enjoys a reach that is extensive and penetrated.
The various expansion projects undertaken by the company will add substantially to the topline and bottomline of the company in the years to come. The group has plans for Real Estate development on 333 acres in Varanasi in which it proposes to develop a Multi-services SEZ for which approvals from Central and State Government has been obtained.
The market cap of the company at the current price is Rs 58 crores. The entire debt of Rs 70 crores (Term Loans of Rs 7.16 crores and the balance as Working Capital) is against Cash Credit Limit (against Rs 85 crores which the company holds as Fixed Deposits). For the first 9 months of FY 08-09, the company has reported PAT of Rs 28 crores. For full year, it is expected to be around Rs 36-38 crores, resulting in an EPS close to Rs 50. The stock thus trades at a PE of just 1.5 at its CMP. Moreover, out of the total turnover of Rs 1155 crores in FY 08, the revenue from Trading is just Rs 281 crores, majority of revenues coming from refining/ manufacturing activity.
With a few expansion projects having gone on stream and the others expected to be on stream soon, we expect a significant scale up of its operations in the coming years with significant growth in Sales and Profitability.
Consider this :-
• The company has a Book Value of Rs 105 (expected to increase to over Rs 150 in Mar 09),
• Generates healthy ROCE of 29%
• The company has a receivable cycle of just 10 days, which talks of prudent financial management & controls
• The impact of expansion projects and acquisitions on the company’s Sales and Profitability will show in the coming years.
• The revenue and profit potential of its 333 acres SEZ in Varanasi as and when the active implementation takes place,
With the roadmap of growth chalked out by the management by way of various expansion projects and acquisitions, the capacities of the company in various segments will go up significantly than the current capacities.
The stock trading at Rs 77 with a PE of 1.5 and a market cap of Rs 58 crores looks grossly undervalued. The growth in the company is clearly visible which we believe could be atleast 25-30% each year for the next few years.
The extent of undervaluation of the company becomes even more evident when compared with the peer group.
Investors can choose to accumulate the stock at the current price and on declines.
JVL Agro Industries Ltd.JVL Agro Industries Ltd. was incorporated in 1989 under the name of Jhunjhunwala Vanaspati Limited. The company set up its unit at Jaunpur, close to Varanasi in the year 1990 with the production capacity of 25 tpd. From a 25 tdp capacity in 1990, the company has grown substantially and now claims to be India’s largest unit for manufacture of vanaspati with a capacity of 72,000 tpa at Jaunpur. The company besides Vanaspati now produces various Refined Oils and Mustard Oil and has recently diversified its business activities into fertilizers and other agro based products.
The company has its manufacturing facilities at Jaunpur, close to Varanasi and at Alwar, Rajasthan. The company has a capacity to produce 72,000 tpa of Vanaspati, 1,14,000 tpa Refined Oils and 81,000 tpa Mustard Oil.
The company sells its products under ‘Jhoola’ brand which commands a market share of 35% of the Uttar Pradesh vanaspati market, 23% share of Bihar, 5% of Jharkhand, 9% of Maharashtra, 6% of Madhya Pradesh and 8% of Gujarat. (Source : Company’s Annual Report March 08)
Expansion and Diversification Projects:
The company has undertaken various expansion and diversification projects which will add substantially to its scale of operations leading to higher revenues and profitability.
• Greenfield Project in Bihar - The Company has acquired around 10 acres at Dahri-on-sone in Bihar to set up a 750-tpd capacity refinery/vanaspati unit. The project is in the final stages of implementation and the first phase for 500 tpd is expected to go on stream in May 2009.
• Expansion at Varanasi Plant - The company has set up a new refinery at Varanasi with a capacity of 400 tpd which has gone on stream in December 2008. This has doubled the production capacity at its Varanasi plant. (from 72,000 tpa before the expansion.)
• Greenfield Project at Haldia - The Company has acquired around 8.5 acres at Haldia to set up a 1000-tpd capacity refinery. The project is under implementation and is expected to go on stream in 2010-11.
• Expansion Project at Alwar - The Company is setting up an edible oil refinery of 100 tpd at Alwar, Rajasthan, to manufacture refined and soybean oil.
• Acquisition of Fertilizer PSU - The Company acquired the assets and properties of 318-acres factory unit of M/s Pyrites Phosphates & Chemicals Limited (a PSU in liquidation) at Amjhore, Bihar, through auction to venture into fertilizers. The unit besides land of 318 acres also has captive pyrite mines, which is the main raw material for manufacture of sulphuric acid used for manufacture of Single Super Phosphate (SSP). The unit has over 250 acres of surplus land which can be utilised for expansion of the unit in future.
• Multi Services SEZ – The group had acquired a stake in Hari Fertilizers Ltd. located in Varanasi and plans to develop a 333 Acre SEZ on the land of Hari Fertilizers Ltd., for which the company has received State and Central Government approvals.
Investment Rationale:
JVL Agro is one of the most attractive proxies of India’s cooking media sector. The company possesses a product basket extending from vanaspati to various refined oils. With a market share of 35% in Uttar Pradesh and 23% in Bihar in Vanaspati, the company commands leadership position across two of India’s most densely populated states. The company has established a strong foothold in these markets, without spending much on advertising. The company has a brand that is visible, attractive and available; has a scale that is imposing and economical and enjoys a reach that is extensive and penetrated.
The various expansion projects undertaken by the company will add substantially to the topline and bottomline of the company in the years to come. The group has plans for Real Estate development on 333 acres in Varanasi in which it proposes to develop a Multi-services SEZ for which approvals from Central and State Government has been obtained.
The market cap of the company at the current price is Rs 58 crores. The entire debt of Rs 70 crores (Term Loans of Rs 7.16 crores and the balance as Working Capital) is against Cash Credit Limit (against Rs 85 crores which the company holds as Fixed Deposits). For the first 9 months of FY 08-09, the company has reported PAT of Rs 28 crores. For full year, it is expected to be around Rs 36-38 crores, resulting in an EPS close to Rs 50. The stock thus trades at a PE of just 1.5 at its CMP. Moreover, out of the total turnover of Rs 1155 crores in FY 08, the revenue from Trading is just Rs 281 crores, majority of revenues coming from refining/ manufacturing activity.
With a few expansion projects having gone on stream and the others expected to be on stream soon, we expect a significant scale up of its operations in the coming years with significant growth in Sales and Profitability.
Consider this :-
• The company has a Book Value of Rs 105 (expected to increase to over Rs 150 in Mar 09),
• Generates healthy ROCE of 29%
• The company has a receivable cycle of just 10 days, which talks of prudent financial management & controls
• The impact of expansion projects and acquisitions on the company’s Sales and Profitability will show in the coming years.
• The revenue and profit potential of its 333 acres SEZ in Varanasi as and when the active implementation takes place,
With the roadmap of growth chalked out by the management by way of various expansion projects and acquisitions, the capacities of the company in various segments will go up significantly than the current capacities.
The stock trading at Rs 77 with a PE of 1.5 and a market cap of Rs 58 crores looks grossly undervalued. The growth in the company is clearly visible which we believe could be atleast 25-30% each year for the next few years.
The extent of undervaluation of the company becomes even more evident when compared with the peer group.
Investors can choose to accumulate the stock at the current price and on declines.
Saturday, April 4, 2009
Nucleus Software Exports Ltd- Multibagger
Strong order flow inspite of slowdown, low dependence on US Markets and Strong Business Model –Nucleus Software, a debt free company having over Rs 100 crores as Cash & Bank Balance looks attractive at the current market cap of Rs 170 crores.
Nucleus Software Exports Ltd.
Nucleus Software Exports Ltd. is a Delhi based company with over 20 years experience of Software development for the Banking & Financial Services industry. The company is focused on Banking, Financial Services and Insurance sectors (BFSI). The company has a 5 acres State of the Art Development Centre in Noida and employs over 2000 people. Besides Noida, the company has development centres in Singapore, Pune and Chennai.
In the mid to late nineties and early two thousands, when most players in the software industry were focusing on low risk service model focusing mainly on the US markets, Nucleus Software chose to take the High Risk model of Product Development and focused on markets in Asia and Far East, the rewards of which have been accruing to the company over the past few years. Infact, the company’s products like FinnOne and Cash@Will command leadership positions in their respective product categories, with FinnOne becoming the world’s largest selling product in its product category.
Nucleus has offices and subsidiaries across the globe – in Japan, Australia, Singapore, Netherlands, UAE, Hong Kong, Philippines and Korea. The company has four development centres globally. The company has a client list comprising of who’s who of the Banking & Financial sector.
The company has been getting various accolades and awards from time to time, recent ones being :-
a) The company’s product FinnOne has recently been ranked as World’s No.1 Selling Lending Software product by International Banking Systems (IBS), UK for the fourth consecutive year.
b) The Annual Report and Accounts of the company for year ended March 31, 2008, have been adjudged as the BEST under the category ‘Information Technology, Communication and Entertainment enterprises’ of the ‘ICAI Awards for Excellence in Financial Reporting’, by the Institute of Chartered Accountants of India (ICAI). A Gold shield will be awarded to the Company by ICAI.
c) For the third consecutive year in 2008, the Company has been selected as one of the “Top 25 Companies Adopting Good Corporate Governance Practices”, by the Institute of Company Secretaries of India (ICSI).
d) For the second year running, the Company has been listed among “Top 15 Exciting Emerging Companies to Work For” by NASSCOM. Your Company has also been recognized under “Best Practices” for Performance Management System by NASSCOM for the year 2008.
Investment Rationale:
Strong Order Flow inspite of Economic Slowdown – Inspite of the slowdown being witnessed across the globe, order flows for the company in the recent times have been strong and the company has added new customers. Nucleus bagged 8 new product orders and acquired 6 new customers for implementing 20 product modules of the FinnOne Suite & Cash@Will in the third quarter of year 2008-09. Product orders were bagged from leading financial institutions in Middle East, South East Asia, India & US. Consolidated for nine months ending December 31, 2008, Nucleus has won 20 new customers and 25 new product orders for implementing 84 modules of FinnOne™ and Cash Management Suite. The order flow continues in the Jan-Mar 09 quarter too as is evident from various announcements made by the company to the Stock Exchanges in recent months. Despite global recession, the company has not lost any clients.
Insulated from US Markets - The company derives just about 1% of its total revenues from the US markets and is largely insulated from the happenings in the US Financial markets. The company thus may not get significantly impacted by the collapsing Banks & Financial Institutions in the US.
Cash is King – The company has Cash and Bank Balance of over Rs 100 cr. The total market cap of the company currently is about Rs 170 cr. The core business is thus going at very attractive valuations. Moreover, the company carries no secured or unsecured loans on its balance sheet and is totally debt free.
The stock of Nucleus Software has fallen from a high of Rs 600 witnessed in 2007 to a current price of around Rs 50. Even though, the slowdown in the world economy and the margin pressure being witnessed by the company may be some of the factors which have taken a toll on the stock price, we feel that the stock of Nucleus Software has been battered primarily on account of the perception factor – when you think of a software company catering to the Banking & Financial Institution sector, the first thing which comes to an investors mind is US and the crumbling Banks, Financial Institutions and Insurance companies there – a closer scrutiny of the company shows that contribution from US is just about 1% of the total revenues of the company.
Besides the pressure on margins being witnessed by the company, one of the reasons for lower profits was Forex losses of Rs 9 cr in the 9 months of the current FY, which may not be of recurring nature. The company has actively taken cost cutting measures and rationalization of resources, the impact of which we believe will show in the coming quarters.
We believe that this debt free company, having Cash and Bank Balance of over Rs 100 cr available at a market cap of Rs 170 cr is attractively valued at the CMP.
Nucleus Software Exports Ltd.
Nucleus Software Exports Ltd. is a Delhi based company with over 20 years experience of Software development for the Banking & Financial Services industry. The company is focused on Banking, Financial Services and Insurance sectors (BFSI). The company has a 5 acres State of the Art Development Centre in Noida and employs over 2000 people. Besides Noida, the company has development centres in Singapore, Pune and Chennai.
In the mid to late nineties and early two thousands, when most players in the software industry were focusing on low risk service model focusing mainly on the US markets, Nucleus Software chose to take the High Risk model of Product Development and focused on markets in Asia and Far East, the rewards of which have been accruing to the company over the past few years. Infact, the company’s products like FinnOne and Cash@Will command leadership positions in their respective product categories, with FinnOne becoming the world’s largest selling product in its product category.
Nucleus has offices and subsidiaries across the globe – in Japan, Australia, Singapore, Netherlands, UAE, Hong Kong, Philippines and Korea. The company has four development centres globally. The company has a client list comprising of who’s who of the Banking & Financial sector.
The company has been getting various accolades and awards from time to time, recent ones being :-
a) The company’s product FinnOne has recently been ranked as World’s No.1 Selling Lending Software product by International Banking Systems (IBS), UK for the fourth consecutive year.
b) The Annual Report and Accounts of the company for year ended March 31, 2008, have been adjudged as the BEST under the category ‘Information Technology, Communication and Entertainment enterprises’ of the ‘ICAI Awards for Excellence in Financial Reporting’, by the Institute of Chartered Accountants of India (ICAI). A Gold shield will be awarded to the Company by ICAI.
c) For the third consecutive year in 2008, the Company has been selected as one of the “Top 25 Companies Adopting Good Corporate Governance Practices”, by the Institute of Company Secretaries of India (ICSI).
d) For the second year running, the Company has been listed among “Top 15 Exciting Emerging Companies to Work For” by NASSCOM. Your Company has also been recognized under “Best Practices” for Performance Management System by NASSCOM for the year 2008.
Investment Rationale:
Strong Order Flow inspite of Economic Slowdown – Inspite of the slowdown being witnessed across the globe, order flows for the company in the recent times have been strong and the company has added new customers. Nucleus bagged 8 new product orders and acquired 6 new customers for implementing 20 product modules of the FinnOne Suite & Cash@Will in the third quarter of year 2008-09. Product orders were bagged from leading financial institutions in Middle East, South East Asia, India & US. Consolidated for nine months ending December 31, 2008, Nucleus has won 20 new customers and 25 new product orders for implementing 84 modules of FinnOne™ and Cash Management Suite. The order flow continues in the Jan-Mar 09 quarter too as is evident from various announcements made by the company to the Stock Exchanges in recent months. Despite global recession, the company has not lost any clients.
Insulated from US Markets - The company derives just about 1% of its total revenues from the US markets and is largely insulated from the happenings in the US Financial markets. The company thus may not get significantly impacted by the collapsing Banks & Financial Institutions in the US.
Cash is King – The company has Cash and Bank Balance of over Rs 100 cr. The total market cap of the company currently is about Rs 170 cr. The core business is thus going at very attractive valuations. Moreover, the company carries no secured or unsecured loans on its balance sheet and is totally debt free.
The stock of Nucleus Software has fallen from a high of Rs 600 witnessed in 2007 to a current price of around Rs 50. Even though, the slowdown in the world economy and the margin pressure being witnessed by the company may be some of the factors which have taken a toll on the stock price, we feel that the stock of Nucleus Software has been battered primarily on account of the perception factor – when you think of a software company catering to the Banking & Financial Institution sector, the first thing which comes to an investors mind is US and the crumbling Banks, Financial Institutions and Insurance companies there – a closer scrutiny of the company shows that contribution from US is just about 1% of the total revenues of the company.
Besides the pressure on margins being witnessed by the company, one of the reasons for lower profits was Forex losses of Rs 9 cr in the 9 months of the current FY, which may not be of recurring nature. The company has actively taken cost cutting measures and rationalization of resources, the impact of which we believe will show in the coming quarters.
We believe that this debt free company, having Cash and Bank Balance of over Rs 100 cr available at a market cap of Rs 170 cr is attractively valued at the CMP.
DLF - Stock Investments
About The company
DLF is the giant of Indian realty sector and has been the most admired promoter well known for its quality in work and the experience they hold.
About the present situation of the sector
The reality sector is the one , who is worst hit in this slowdown. The promoting company has to face many challenges , thereby losing the considerable part of the total income earned in the past rally. Either new projects are not launched , who were scheduled to be inaugurated and those who has already in process has negligible speed in the work progress due to lack of realization of installment and excess cancellation of bookings.
DLF Nightmare
Almost 300 buyers, who had backed out of DLF’s ‘Garden City’ project in Chennai, refused to leave its premises till they got a written assurance that their money would be paid back in full. The total number of exiters from the project was 580 out of its existing base of 1,800 customers and DLF was to give a letter outlining the timeline of refund. But people just continued waiting and and finally patience wore off and angry people refused to leave DLF premises until they got the refund letters.
DLF has now assured them that the formal refund letter addressed individually to the exiters would be given by April first and the process of full refund will commence from 1st April, 2009, and will be completed before 30 September, 2009. The priority of disbursement shall be based on the order of first exit letters received and will be intimated by 10th April 2009. Times are indeed bad but it seems to be the worst phase for realty developers.
DLF is the giant of Indian realty sector and has been the most admired promoter well known for its quality in work and the experience they hold.
About the present situation of the sector
The reality sector is the one , who is worst hit in this slowdown. The promoting company has to face many challenges , thereby losing the considerable part of the total income earned in the past rally. Either new projects are not launched , who were scheduled to be inaugurated and those who has already in process has negligible speed in the work progress due to lack of realization of installment and excess cancellation of bookings.
DLF Nightmare
Almost 300 buyers, who had backed out of DLF’s ‘Garden City’ project in Chennai, refused to leave its premises till they got a written assurance that their money would be paid back in full. The total number of exiters from the project was 580 out of its existing base of 1,800 customers and DLF was to give a letter outlining the timeline of refund. But people just continued waiting and and finally patience wore off and angry people refused to leave DLF premises until they got the refund letters.
DLF has now assured them that the formal refund letter addressed individually to the exiters would be given by April first and the process of full refund will commence from 1st April, 2009, and will be completed before 30 September, 2009. The priority of disbursement shall be based on the order of first exit letters received and will be intimated by 10th April 2009. Times are indeed bad but it seems to be the worst phase for realty developers.
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