Saturday, August 17, 2013

BLUE STAR INFOTECH - GOOD TIMES AHEAD










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

29 comments :

  1. Sir,

    Request your views on Havells(@610), Emami(@440) and Asian paints(@410). I think these are good buys at current levels for the long term, but would like your views as well..

    Regards,
    Anand

    ReplyDelete
    Replies
    1. Many experts are now writing off FMCG stocks on the basis of higher valuation and slow growth in last quarter.But I believe , there is no reason for the same only because of the slow down in one or two quarter and the premium valuations of FMCG stocks will continue mainly because of their 'difficult to replicate' business model and better cash flow compared with other sectors.So FMCG cos with good brands are BUY for me in every dip for long term investors.

      Delete
  2. Dear sir,
    Kindly suggest one bank & fmcg stock, so that in this market we will have a chance to grab it...

    ReplyDelete
  3. With all negatives,I still prefer Yes Bank for long term Investment .Considering the volatility buy only in SIP mode.From FMCG one can consider Britannia

    ReplyDelete
  4. Dear sir,
    pl advice on sesa-sterlite after merger.
    if we consider market value of it's holding in HZL and cairn india are itself more than sesa-sterlite market cap..!!!
    we are getting iron ore, copper, aluminium, Energy aseet at free of cost..!!

    ReplyDelete
    Replies
    1. Due to multiple issues of our economy, nobody can predict the bottom of market.Investors with long term view can buy sharply corrected stocks in SIP mode .Never buy stocks with borrowed or time bounded fund in these kind of market.

      Delete
  5. Hi Sir, whats your view on sequent scientific do u think its a good time to enter this stock now ... plz reply......

    ReplyDelete
    Replies
    1. No change in previous opinion on Sequent

      Delete
  6. Sir, what is your current view on Rossell. Promoters are buying regularly and have now reached 74.86% .

    Should we accumulate it

    ReplyDelete
    Replies
    1. Not tracking strictly post inclusion in Periodic Call Auction

      Delete
  7. Sir,

    Orient Bell has come to Rs 40 range
    Is it right time to average it down.

    looking for your advice

    Thanks
    Arun

    ReplyDelete
    Replies
    1. Stocks directly or indirectly connected with Interest rates may take more time to recover.

      Delete
  8. Sir,
    Request your views on HCC, i have bought @40 level, should i keep it or exit or accumulate?

    Please reply please

    ReplyDelete
  9. hi,
    its surprise to see kaveri seeds results, are you sure those figures are accurate and not "fudged"? they dont pay excise duty, very meager tax, it resembles like some specific IT companies results and later vanished. the biggest seed company in the world monsanto is having somewhat same sales for last couple of years, and kaveri is showing 100 percent growth yoy.
    thanks,
    jayesh

    ReplyDelete
    Replies
    1. Dear Jayesh

      As per Indian Tax laws ,Income from sale of seeds is treated as agricultural income .You will get a clear picture of tax treatment on such income from the below link which will clear your doubt about the lower tax paid by Kaveri

      http://taxguru.in/income-tax/income-tax-treatment-taxability-of-agricultural-income.html

      Delete
    2. Hi VP,
      But monsanto is having stagnated growth in sales and kaveri is showing 100% yoy, what is so special about them against the world giant to show such kind of growth, if they have special seeds/genetical engineering techniques than everyone else then why they are not marketing those seeds or techniques outside india? so many questions :), if you are going for AGM it will be nice to ask

      Thanks,
      Jay

      Delete
    3. Monsanto is a world giant but the listed company in India is not a giant.In other words they are cheating the minority share holders of listed company by launching all new products through their unlisted company which is a direct subsidiary of the parent company.Only two products ie, Roundup herbicide and Dekalb Maize seeds are marketed through the listed Monsanto.As you are aware seed is not a products like any industrial product and its products can't increased in short notice even there is more demand.More than that varities required for Indian market or even certain regional markets may not suitable for overseas .If there is sufficient demand for whatever they can supply ,why they need to go for out side India ? .Now they are planning to enter in northern market.

      Delete
  10. hi sir .. wats ur view on biocon .. Seems the profile luks gud .. wats ur suggestion on this.

    ReplyDelete
    Replies
    1. Stock recommended many times in the past,no change in views

      Delete
  11. Hi Sir,
    Request your views on NHPC, I have bought @ 27, I want to hold for 10 years. Please advice me on this.

    ReplyDelete
  12. Kinldy let me know your thoughts on JP associates. I have bought @78.

    ReplyDelete
    Replies
    1. Frankly speaking I don't like the management of JP Group ,so not tracking any of the cos from this group.In the past they took many anti minority share holder friendly decisions.

      Delete
  13. Dear VP

    Shall be thankful if you could give your comments on Lakshmi Energy.

    Regards

    ReplyDelete
    Replies
    1. It is known that the promoters of Lakshmi Energy having some exposure in NSEL related issue.This may be the reason for fall in Lakshmi's share price.

      Delete
  14. Do you track Ybrant Digital? Whats your take on Westlife Development, they are finally started trading shares :-)
    Also last one Assam Company?

    ReplyDelete
    Replies
    1. Not tracking Ybrant and Assam Company.Even with the Mc donald tag ,CMP of Westlife is very high.

      Delete
  15. Dear Valuepick, do you have any idea on Nucleus software? There were some strong recommendation on this stock in 2008-09. But as a product oriented IT company its performance has been dismal. Growth seems to be an issue; don't know whether leadership / management team is an issue. How does it compare with Blue Star Info?? I have burnt my fingers in 2008; entered @ 170 level on recommendation of some analyst.

    Any idea about Heleos and Metheson. Business India has run a corporate story on this in the latest issue. But I found some shares pledged by promoter.

    regards!-Follower

    ReplyDelete

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