IT stocks are attracting renewed buying interest due to more than one reasons . Possibility of revival in Western economies after a gap of few sluggish years is the major reason for this bullishness .A favorable exchange rate is also helping IT companies to expand margins.In addition to such factors ,IT is a sector which may not affect much due to any political changes or uncertainties in the centre, post parliament election.In recent times ,many readers requested to suggest some good IT stocks from small/mid cap space .The biggest challenge in selecting listed IT companies for investment purpose from mid/small cap is the integrity of promoters. During 2000 IT bubble many companies from this sector collected money through IPO and then disappeared even without any trace.Most of the small and mid size IT companies following asset light business models and only the human resources are their asset which is prone to attrition.Hence promoter integrity is most important in such businesses compared with asset rich business models.So, evaluating a small IT company is more challenging especially at a time most of them are trading around their highs.Considering all these factors , this week recommending a Chennai based small IT company– Saksoft Ltd.
Link to latest Annual Report HERE
Disc: I have vested interest in Saksoft.