Saturday, August 17, 2013
In a difficult economic environment like the present one, stock selection for investment needs extra care ,especially in the case of small and mid caps.At present there are many challenges for Corporate India like slowing demand,mounting interest burden,sharp fall in Rupee value ..etc.etc..As far as the investors in small and mid caps are concerned another important threat is the frauds and foul plays by the promoters and fudged balance sheets.
This week, let us look into a company – BLUE STAR INFOTECH(BSIL) - which is suitable for Investment on many counts in this tough situation.This Mumbai based mid size IT company belongs to the reputed Blue Star Group .Considering the history and reputation of promoters there is no chance for Zylog Systems,Glodyne Techno ..etc type developments in this company .Company operating in different verticals of IT like Business intelligence and Analytics , Cloud computing,Mobility Computing,Product Engineering,Testing ..etc. Company concentrating mainly in Healthcare,Pharma,Manufacturing ,Travel and Hospitality and Media and Entertainment sectors.BSIL’s operations span across USA, UK, Europe, India, Japan and Singapore. A major portion of income is deriving from US market.Revival in US economy is expected to bring more growth opportunities for the company going forward.In recent times company also trying to grow through inorganic route.Last year BSIL acquired Singapore based Infostack Solutions, that specialises in providing value chain management solutions.Recently company invested in the equity of Activecubes, which is a global firm operating in the Decision Management space. In the last few quarters ,company reporting out performance and high growth rate compared with other companies from the same space.In the latest June quarter ,on a consolidated basis ,company reported a turnover of Rs.47 Cr ( Rs.31 Cr) and a net profit of Rs.4 Cr ( Rs.89 lakhs) .BSIL already reported an EPS of Rs.4 in June quarter alone which is close to its last full year EPS. Company having an un interrupted dividend paying record for the past 13 years.
A zero debt company with good balance sheet from a reputed business group and earning major portion of income from overseas is a good choice in the current circumstances.Stock is currently available even below its book value @ Rs.72.Recommending a BUY for long term @ CMP.Stock listed both in NSE and BSE
10 Year Performance at a glance :
Link to Company Website HERE
Disc: I have vested interest in BSIL
Posted by VALUEPICK at 7:11 AM