Saturday, August 24, 2013

SASKEN COMMUNICATION LTD - FIGHTING FOR A COMEBACK



  
 
 












Sasken Communication was a sizzling stock in Indian bourses for a long time.Once it termed as one of the most promising mid size IT company from India .In 2007 its share price touched a high of even Rs.624. which later plunged to Rs.40 level in 2009.Sure, it is not without any reason. Sasken is a  communication software company with considerable presence in the broadband and wireless software space. Its core expertise lies in developing embedded communication software for companies across the communication value chain-network equipment manufacturers, semiconductor vendors and mobile terminal vendors.Sasken is also present in application software development for communication service providers.Many once well known companies  like Nortel, Nokia, Motorola ..etc were the prime customers of Sasken.Sasken's strategy to depend on very few customers for its revenue growth  came as a big blow on the company when Nortel filed for  bankruptcy protection in 2009.Nortel was the largest customer and a minority share holder of Sasken. The change of equations in telecom sector also affected the growth of sasken in recent years.In the past five years company reported continuous fall in revenue and exit of some high profile executives from the company.After a long gap promoters are now taking some proactive steps to prevent further fall and bring back growth.Sasken is now planning to diversify into more new areas and more customers  to de-risk by avoiding the earler situation of depending only on handful customers.

                                                    The most important decision by the management  is to induct more professionals in  the company.Recently ,its founder CEO Rajiv Mody  resigned from the post and appointed Mr Anjan Lahiri as the CEO.Mody will continue as the CMD of the company.Mr.Anjan Lahiri is a well known figure as the CEO of MindTree Ltd’s information technology business.Only recently he quit Mind Tree  and in last week joined in Sasken as Whole time Director and Chief Executive Officer. Anjan is  one of the 10 professionals from  Wipro and  Cambridge Technology Partners who came together to start Mindtree in 1999, and also known as the main piller who stabilised the business of  Mindtree post departure of Ashok Soota in 2011.He is also known as one of the best Sales guy in IT Industry .Sasken is expected to gain from the experience and expertise of Anjan at a time when the company  desperately needs a lifeline.



                                                                                                  On the financial side ,Sasken reported  a turnover of Rs.475 Cr ,net profit of Rs.32 Cr, and an EPS of Rs.13 in FY 2012-2013.In the latest quarter, Company reported  some improvement in its top line and bottom line compared with March quarter. June qtr sales were Rs.115 Cr and net profit is Rs.17 Cr and qtr EPS is Rs.8 .Company is continuously paying hefty dividend .In last two years company distributed 70% each and in this FY, already declared an interim dividend of 45%. In the past few days promoters started purchasing shares from open market which is another positive sign.



I believe ,promoters are now taking some serious  efforts to bring back the company into the right track and the result of such efforts will start to reflect in coming years.Those with some risk appetite can take limited exposure in Sasken at CMP of Rs.118 with a long term view.

Link to company website HERE

Link to latest AR HERE 

 

36 comments :

  1. Sir does market cap includes the share with promoter ie if 70% share are with promoter and company has market cap of 100cr does that mean it's the price of rest 30%

    Please answer this,i tried to figure out but didn't find the answer

    Vijay

    ReplyDelete
    Replies
    1. Total market cap and free float market cap are seperately available in BSE website

      Delete
  2. Dear Vijay, Market cap means multiplication of total no of share with current market price. you question is vague. Regareds Rama Rama

    ReplyDelete
  3. Hi Vijay.. U should learn some basics..
    Market cap u will get once u multiply total shares * share price.. Not considering public share holding..

    ReplyDelete
  4. May I know your view about mindtree .seems to be a good company.

    Arpit
    Bombay

    ReplyDelete
    Replies
    1. At current market price I prefer Persistent over Mindtree.

      Delete
  5. Answer to your question is NO.market cap include all the shares

    ReplyDelete
  6. Replies
    1. If you are not interested to take above average risk,better to wait till some more clarity emerges on tax related issue ,or buy only in SIP mode.

      Delete
  7. Dear VP,

    Sequent has started its up move again. I Hope there is some good news this quarter.

    BR,
    Shankar.

    ReplyDelete
  8. Only recently promoters got permission to sell out Agila .I hope from now onwards they will pay much attention to Sequent .Effect of USFDA approval for their plant may start to reflect from second half onwards.

    ReplyDelete
  9. Dear sir,

    Markets in blood bath, can you please advice or share your expertise in this difficult situation, whether to sell all the shares at current cmp & buy at another bottom, or stay calm, sir please give your thoughts.

    ReplyDelete
    Replies
    1. I don't think selling in blood bath and run away from market is the right strategy in stock market for long term wealth creation.Try to buy good stocks with less debt and better cash flow in SIP mode.

      Delete
  10. may I ask u weather do u invest In large cap companies and gold etf( since I only see recommendation of small cap companies). I know that its a choice of risk but still would like to know ur position


    ghenshyam

    ReplyDelete
    Replies
    1. Dear Ghenshyam

      Large caps also started to fall sharply.So you can surely look into large cap space too.

      Delete
  11. Dear Sir, what do you think on this recent news of Aegis =>
    "After buyout break, Aegis eyes 3 targets worth up to Rs 225 cr"
    http://economictimes.indiatimes.com/tech/ites/after-buyout-break-aegis-eyes-3-targets-worth-up-to-rs-225-cr/articleshow/22109517.cms

    Would that help their profitability ratio downline?

    -MAyur

    ReplyDelete
    Replies
    1. Thhis news is not related with Aegis Logistics

      Delete
  12. Sir, your views on Oberoi realty - a debt free comp in real estate sector? other financial figured looks good.
    Pls share your views.

    Anirudh

    ReplyDelete
  13. Hi VP Sir,

    What will be the effect of Rupee depreciation on the performance of Ashapura Mine on the long run.

    Rgds

    Zain

    ReplyDelete
    Replies
    1. I think Ashapura is one of the biggest beneficiery of Rupee depreciation.

      Delete
  14. hello sir
    can we buy share who are less than 10 rs.
    for 10 to 20 years investments.

    ReplyDelete
    Replies
    1. Please don't consider investing in stocks like an FD which increases with time.Only growth of business will bring return

      Delete
  15. Dear VP,
    Give your view on DQ Entertainment. It is buy at camp 12 or not.

    ReplyDelete
  16. sir your view on IDFC please (i have gone through the track record of IDFC its so nice ) do you feel is it right time to invest in IDFC
    waiting for your reply
    thank you

    ReplyDelete
    Replies
    1. The target industry of IDFC is going through tough times .After the news of reduction in FIi limit ,stock crashed in past few days. But this reduction is only to become eligible for Banking License.Overall I believe ,worth a bet at current price .But go through SIP mode.

      Delete
  17. sir,

    With rupee depreciation on the cards, i am thinking of buying Granules at current cmp, i need your advice whether at current cmp is a buy....

    ReplyDelete
  18. sir i have one doubt on claris life sciences after selling of 60% infusion business to OTSUKA pharma pramoters decreased their stake by 2% and FII'S increased their stake by 2% in the last quarter is there any good in the business prospects for the increase in the stake by FII
    waiting for your reply
    thank u

    ReplyDelete
    Replies
    1. Unfortunately many companies are selling part of their assets but not passing anything to minority share holders.Since this incident I am not tracking Claris Lifescience.

      Delete
    2. you are right sir after completion of their transfer of that business they got 1050cr they didn't given any divident or buy back offer till now

      thank you

      Delete
  19. sir,
    Your views on marksans pharma with effect of rupee depreciation...

    ReplyDelete
    Replies
    1. This may create some more pressure since FCCB repayment is there.

      Delete
  20. Does look quite attractive on almost all valuation metrics - indeed a value buy in my opinion!

    ReplyDelete

Followers

Tweet TopOfBlogs