PICK OF THE WEEK
Info Drive Software Ltd
BSE Code: 530703
CMP: Rs.27.10
EPS: Rs.1.63
Introduction: Info-Drive Software Limited [BSE: INFDS, 530703], is a multi-dimensional Technology and Business Services Company offering:
* Specialized expertise in Applications Deployment and Banking Solutions
* Remote Infrastructure Management
* Biometric Solutions at enterprise level and
*Back-office transaction processing in Healthcare and Benefit Administration domains.
The company serves the high-growth banking in the Middle East and
With headquarters in Chennai (
Its corporate culture is driven by:
* A strong sense of client-centricity
* Empowered decision-making with high accountability
* Sustained investment in domain expertise for continual differentiation in offerings and
* A constant focus on identifying green field opportunities for steady value creation for the company.
These attributes have fuelled Info-Drive’s rapid growth in the chosen markets, helping it become a truly ‘niche’ provider of both scale and specialized services. Partnering on an integrated or discrete engagement model, we are able to unlock measurable savings for clients globally.
Its portfolio of services entails:
* Business Process Outsourcing services
o Healthcare (Data Capture, coding and billing)
o Benefit Administration services (Life cycle of Qualified Pension Plans and IRS filing)
* IT Services
o Lifecycle Development Services
o Product Support and Customization Services
o Platform Porting Services
o Product Migration Services
* IT Infrastructure Management Services
o Remote Infrastructure Management
o
* Biometrics
o Avant Guard-Auto
o Avant Guard-IT
o Avant Guard-Access Control
o Avant Guard- 32 Bit E-Kit
Shareholding Pattern: The promoters hold 18.50% while private corporate bodies hold 16.51%. The non-promoter holding is 81.50%.
| Share Holding Pattern as on : | 31/03/2010 | 31/12/2009 | 30/09/2009 | |||
| Face Value | 10.00 | 10.00 | 10.00 | |||
| | No. Of Shares | % Holding | No. Of Shares | % Holding | No. Of Shares | % Holding |
| PROMOTER'S HOLDING | ||||||
| Indian Promoters | 5408456 | 18.50 | 5407956 | 18.50 | 5372208 | 18.37 |
| Sub Total | 5408456 | 18.50 | 5407956 | 18.50 | 5372208 | 18.37 |
| | ||||||
| NON PROMOTER'S HOLDING | ||||||
| Institutional Investors | ||||||
| Mutual Funds and UTI | 800 | 0.00 | 800 | 0.00 | 800 | 0.00 |
| Banks Fin. Inst. and Insurance | 7600 | 0.03 | 8000 | 0.03 | 8000 | 0.03 |
| FII's | 91689 | 0.31 | 91689 | 0.31 | 91689 | 0.31 |
| Sub Total | 100089 | 0.34 | 100489 | 0.34 | 100489 | 0.34 |
| Other Investors | ||||||
| Private Corporate Bodies | 4827674 | 16.51 | 4836407 | 16.54 | 4859177 | 16.62 |
| NRI's/OCB's/Foreign Others | 4015445 | 13.73 | 2989783 | 10.23 | 3920618 | 13.41 |
| Others | 1026589 | 3.51 | 1001917 | 3.43 | 1002828 | 3.43 |
| Sub Total | 9869708 | 33.76 | 8828107 | 30.19 | 9782623 | 33.46 |
| General Public | 13860637 | 47.40 | 14902338 | 50.97 | 13983570 | 47.83 |
| GRAND TOTAL | 29238890 | 100.00 | 29238890 | 100.00 | 29238890 | 100.00 |
Financials: For FY09, the net sales of the company came out to be Rs.13.65 Cr as against Rs.4.25 Cr in the same period previous year. The other income of the company came out to be Rs.97 lakhs as against Rs.49 lakhs in the same period previous year. The operating profit of the company for FY09 came out to be Rs.4.77 Cr as against Rs.2.64 Cr in the same period previous year. The Gross profit of the company for FY09 came out to be Rs.5.55 Cr as against Rs.2.95 Cr in the same period previous year. The net profit if the company for FY09, came out to be Rs.5.22 Cr as against Rs.2.28 Cr in the same period previous year.
The EPS of the company for FY09 came out to be Rs.1.79 as against Rs.0.78. The net profit in FY09 would have been much higher if the employee expenditure and other expenses have not shot up by so much. The employee expenditure increased to Rs.1.64 Cr in FY09, as against Rs.72 lakhs in the same period previous year. The other expenditure shot up to Rs.7.24 Cr as against Rs.90 lakhs in the same period previous year. The depreciation has also increased significantly during FY09, as against FY08.
For Q3FY10, the total sales of the company came out to be Rs.5.19 Cr as against Rs.6.46 Cr in the same period previous year. The operating profit of the company nearly doubled to Rs.1.84 Cr in Q3FY10 as against Rs.1.03 Cr in the same period previous year. The net profit of the company for Q3FY10 came out to be Rs.1.62 Cr as against Rs.1.01 Cr in the same period previous year. The operating profit margin of the company increased to 35.51% in Q3FY10 as against 15.85 % in the same period previous year. The GPM of the company increased to 32.7% as against 17.57% in the same period previous year. The NPM of the company increased to 30.95% (almost double) in Q3FY10, as against 15.19% in the same period previous year. The EPS of the company for Q3FY10 came out to be Rs.0.55 as against Rs.0.34 in the same period previous year.
For the nine months ending December, 2009, the total sales of the company came out to be Rs.10.69 Cr as against Rs.119.4 Cr in the same period previous year. The net profit of the company during the period came out to be Rs.4.20 Cr as against Rs.3.98 Cr in the same period previous year. The operating profit margin of the company also increased to 43.96% as against 34.77% in the same period previous year. The NPM of the company during the period came out to be 38.81% as against 31.74% in the same period previous year. The EPS of the company for the nine months ending December, 2009, came out to be Rs.1.44 as against Rs.1.36 in the same period previous year.
However, a little concern is given by the fact that during the nine months ending December, 2009, the employee expenditure almost doubled to Rs.2.64 Cr as against Rs.1.19 Cr in the same period previous year. But this is offset by the significant decrease in the other expenses to Rs.3.35 Cr as against Rs.6.6 Cr during the nine months ending December, 2009.
Triggers:
- There is a big change in the global economy and the Company has been able to adapt well and march along with overall improved performance. Keeping in mind the Company’s future outlook and the avowed objective to reward the Shareholders, the Board shall maintain its policy of returning a portion of its free cash flow to its shareholders at a level it considers prudent in light of the current economic and financial environment. The Board recommended a Dividend of 5% (Rs.0.50 paise) per share for FY 08-09. The Board is confident of ensuring sustainable returns to the Shareholders for now and many years to come.
- The Company continued to win new engagements and grow existing relationships in the traditional area of Hardware Sales & Maintenance, Systems Integration and has strengthened its presence in areas such as IT Consulting and IT Infrastructure Management services. The broad range of services enables the Company to provide end-to-end solutions to its clients - combined with its geographical spread provided comprehensive and high value added services to its clientele.
- The Company in FY 08-09 has chalked out a new strategy and has realigned its operating structure and enhanced technology offering. The revised organizational operating structure paves the way for more accountability & performance by casting a P&L responsibility on Heads of Operations. The Company today is much more focused and is executing at a higher efficiency than a year ago.
- The synergies between the subsidiaries which have been acquired in the past are yielding results in making InfoDrive as a group, provider of end-to-end comprehensive solutions.
- The Company’s Income from operations in FY09 grew by 221% to Rs.13.65 Cr from Rs.4.25 Cr in 2008, thus making further growth in 2009. The corresponding Total expenditure including depreciation is Rs.9.28 Cr in 2009 from Rs.1.87 Cr in 2008. Correspondingly the Profit after Tax increased by 129% to Rs.5.22 Cr in 2009 as compared to a profit of Rs.2.28 Cr in 2008.. The Company’s Stand alone operations have shown substantial growth. The company seeks long term engagements with clients while addressing their Outsourcing requirements. Its customer centric approach has resulted in high level of client satisfaction. The demand for the Company’s services continues to look robust, and the relentless focus on niche areas within Business Process Outsourcing (BPO) and Information and Communication Technology (ICT) services continues to resonate with target customers.
- The Company’s chosen target segment in BPO space does not have any exposure to the recession in
- The Company’s investments in uncontested market opportunities and innovation have enabled it to conceptualize and undertake a large, end-to-end critical project in Digi-Life segment. As part of this practice initiative, the Company has won several high-value contracts in Information and Communication Technology (ICT). It has rapidly established itself as industry leader in creating a truly unique e-Living Practice that provides automation, digital life-style, and community networking & unified integration of media, telecom and internet for homes and community.
- The quality of revenue and the annuity nature of its client contracts make its growth plans highly predictable and sustainable over a longer time horizon, relative to its sector peers. The global economic events and the resultant slow- down has created enormous headwind to the growth of services industry in general and offshore outsourcing industry in particular. The Company’s investments in new growth engines like e-living, specialized service offerings in BPO like Benefits Administration Services and value centricity in the large Systems Integration projects have helped convert today’s challenging market environment into opportunities for growth.
- Even in this difficult environment, the Company continues to make substantial investments in developing its domain expertise and strengthening its technology competencies. The Company is focused on Intellectual Property (IP) led growth strategy in some of the chosen service offerings and as a testimony have built several tools like InsTIL, CampIT, industry pioneering Biometrics solutions and are actively offering these to several blue-chip clients, as an integral part of its service offerings. As a result of these initiatives, the Company is well equipped to benefit when the global economy, especially the
- Though the current external macroeconomic conditions continue to be uncertain, however it is widely believed that the company’s performance bulwarked by a professional management team will continue to surpass the expectations, as witnessed over the last few years.
· Info-Drive Software Limited (Singapore Branch) was incorporated in November 2007, to expand its business in Hardware Sales & support services business in
- Subsidiaries: The Company today is a global corporation having presence in 5 countries :
Subsidiary Country of Incorporation Info-Drive Software Inc United States of America Info-Drive Systems Sdn Bhd Malaysia Info-Drive Software LLC United Arab Emirates Precision Infomatic (Madras ) Pvt Ltd India Info-Drive Software Pte Limited Singapore Info-Drive Software Limited Canada Precision Techserve Private Limited India Precision Galaxy Private Limited India Precision Techconet Private Limited India Legend Systems Private Limited India Technoprism Inc United States of America Technoprism LLC United States of America During FY09, InfoDrive Dubai has made good progress on its strategy to target multi-year deals with end to end ownership of customer systems and processes. This initiative has helped the Company further its objective of long term partnership with the customers. Within few months of launch of Digi-life practice, InfoDrive Dubai secured its first multiyear million dollar order in ICT space for
- Info-Drive Software Ltd has informed last month that it is entering into the S A S, and Risk Management Practices. These Practices are advanced and analytical practices in the areas of operational risks, anti -money laundering, fraud analytics, and customized fraud solutions. The company hopes to derive significant revenues from it.
- Last year, Info-Drive Software LLC, an IT services provider and a subsidiary of Chennai-based Info-Drive Software and Xerox had formed a "go to market" strategic partnership for offering to the customers paperless office products and total document solutions of Xerox in the UAE. In a statement, Info-Drive said the tie up will help medium and large enterprises to conserve cash by eliminating wastes and business-non value -adds at department and organization level while retaining core business value adds. It is one of the few who has become a member of the business partner program of Xerox Solutions & products in the UAE.
Conclusion: Considering the points mentioned above the scrip could be purchased at the CMP of Rs.27.10 for a target of Rs.31-31.5 in the very short term. MACD, Bollinger Bands, Stochastics, etc are in buy mode and cross over could take the scrip upto Rs.35 in the short to medium term, unless the world markets further crashes. The candle stick chart pattern is indicating good upward movements in the days to come. Moreover, volume built-up was seen in the counter in the last trading session. But on the negative side the scrip is still below its 50 and 200 DMA. In case of any market crash please put a Stop Loss at Rs.24.5.
Note: The stock was recommended to the Paid Groups on this Sunday (9th May, 2010) in the Sunday Report.
Disclaimer: Though due care has been taken while preparing this report but no responsibility will be assumed by the author for the consequences what so ever, resulting out of acting on these recommendations or after reading the report.
The calls made herein are for informational purposes and are not recommendations to any person to buy or sell any securities. The information is derived from sources that are deemed to be reliable but its accuracy and completeness are not guaranteed. The author does not accept any liability for the use of this column for buying and selling of securities. Readers of this column who buy or sell securities based on the information in this column are solely responsible for their actions. The author, his acquaintances, his company or his family members may or may not have positions in the Scrips mentioned in this column. Investors should take their own decisions while buying and selling the shares/securities.
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