Saturday, July 5, 2014

DION GLOBAL SOLUTIONS LTD - BETTER DAYS AHEAD ?



    

 

  

Many of my readers may be  aware about the unfortunate incidents happened in once famous ‘ Financial Technologies Ltd ‘  and to its promoter .If we look back ,the success of this company in the past was  mainly due to  its cutting edge offerings in Risk management,Exchange management and various solutions for broking related business.At a time ,this company is going through a rough patch, let us look into another small and unknown company which slowly showing improved business in the same space.Dion Global Solutions is a company owned by the former promoters of one of India’s largest pharma firm Ranbaxy.Dion Global  is  a leading provider of software for Banking ,Financial Service  and Insurance (BFSI) sector and also providing research and information services to financial institutions, media and publication entities.Company offering various products to verticals like Trading and settlement,Risk Management,Research,compliance..etc . Commercial Banks,Stock Broking firms,Insurance companies,Finance companies,stock exchanges,Depositories and custodians,Asset management companies and hedge funds ..etc are the target customers of Dion.
                                                                                   At present company’s presence in India is limited but it is gaining ground overseas .Through its various subsidiaries and associate companies Dion operating in more than 60 countries across the globe.As part of its expansion strategy company acquired strategic stakes in many foreign companies .In 2010 Dion took 44 % stake in the holding company of Chase Cooper ,a leading London based  provider of technology and solutions for BFSI segment with presence in more than 85 countries.In 2011 Company acquired UK based Investmaster group which is also in the same line of business. In 2012 ,Company acquired Germany based Swissrisk Financial Systems .After the Lehman crisis financial institutions,especially large overseas banks and financial institutions taking every steps to ensure better fraud management and stringent verifications and validation processes.In additions to this ,all internationals banks should comply with Basel III norms by 31 December 2018 and all Indian Banks by 31 March 2018.This will offer good opportunities for companies like Dion which specialising in Risk Management field. Last year company introduced FATCATRAC - a software solution to assist Financial Institutions in meeting the US Foreign Account Tax Compliance Act which is getting overwhelming response from overseas private banks.
 The Tech Mahindra Link

Spotting the capabilities of Dion and opportunities ahead,One of India’s largest Software firm Tech Mahindra took a 16 % stake in Dion  in last Financial year by subscribing shares worth Rs.35 Cr. This strategic partnership is expected to bring good results going forward .  Mr. C P Gurnani, CEO and  MD of Tech Mahindra stated about this acquisition as  “We are extremely impressed by Dion’s products and solutions ,  its ability to truly partner with its clients, and most of all, its top-class management team.  We are convinced that in time to come, Dion will become one of the foremost software solutions providers to capital markets globally and are keen on participating in Dion’s promising future.” 

After few years of slump, Global financial industry is looking up now .Dion is now taking various efforts to tap the emerging opportunities and taking business as serious . At a time its close rival Financial Technologies is facing multiple issues Dion is now actively planning to tap local market too . In this effort ,financial and technical support from a company like Tech Mahindra will be an added advantage for Dion .Last week company empaneled with BSE for providing IML (Intermediate Message Layer  ) Based  trading services to BSE trading members in the Currency Derivatives Segment .BSE circular Link HERE

Read Dion's recent order wins HERE
   
Financials and Conclusion
On a consolidated basis ,company’s top line spurted from Rs.90 Cr in 2010 to Rs.223 Cr in 2014 . Its bottom line is still in loss on an yearly basis .In last financial year , to write of its entire accumulated loss Dion reduced its equity capital by half .Promoters are holding 53 % stake and other FI’s and Tech Mahindra together holding another 34 % stake. Because of low floating stock ,liquidity is low in this counter.If you are a  risk averse investor and considering conventional valuation parameters for investment decisions ,it is not a stock for you .I believe, due to various reasons ,company is at an inflection point and the better days are just coming.But it is a long term story and a stock only for those with enough patience.Remember ,this is not a 'valuepick' but a stock suggestion based on the anticipated future growth of company .Dion is listed only in BSE and currently trading around Rs.66


Link to Company website HERE


Disc: It is safe to assume that I  have vested interest in Dion 


65 comments :

  1. HI VP, Can I buy IDFC and L&T Finance at CMP? Do you recommend to add to portfolio in SIP Mode? Thank you. Veera Brahmam

    ReplyDelete
    Replies
    1. Suitable for long term passive investors

      Delete
  2. Hello Sir,

    Thank you for the new reco.

    Wanted your opinion on Marico Kaya. I am convinced about their business model. Can one enter at current levels or wait for a correction?

    Thanks!

    ReplyDelete
  3. Sir,
    Thanks for Dion global IT stock recommendation, once again you have fullfilled your committment to give one IT stock as you promissed before general election.I had it long back and sold cheaply but again i will buy and hold long term.I have few Bal Pharma stock, want to know your views on this also.thanks.

    ReplyDelete
  4. Good pick and thanks sir I am holding bilcare .orchid chemical and balaji amines after your recommendation now I am in profit in these stocks whether I hold or book profit what is your view sir

    ReplyDelete
  5. Good Morning VP jee....

    This is a loss making company. I am not very impressed with its financial results or data and though I was amazed that it is acquiring firms in overseas and to the surprise to see this company is winning so many orders plus tech mahindra got a small chunk.

    To my confusion it reduced its equity capital to half to reduce the loss when it is getting tremendous order. I am very confused, I have to catch my close economics lecturer . I feel it is a high risk investment but if it clicks it will rock on...... Please show some light to my little knowledge sir.

    Thank you

    ReplyDelete
  6. Sir, appreciate if I can get your views on hov services. Thank you.

    ReplyDelete
  7. Dear VP sir,
    Thanks for your analysis on Dion.
    Would like to have your views on below stocks. Are you tracking any of these. Would appreciate your views on these -

    SNL Bearings
    Pacific Industries Ltd
    ASTEC life science
    Nath Seeds
    Kuantum paper
    Triveni Glass
    WestCoast Paper
    GALADA Power
    TIL
    Bodal
    OM metal infra

    Also...as our PM's high focus on improving and modernizing railways, its very obvious that lot many companies which are working in this space would grow. Do you have any of these on your radar ? Here are few to name who seem to active these days -

    Titagarh Wagon , Kalindee Rail , Kernex Micro , Hind Rectifiers and Texmaco

    Thanks,
    RC

    ReplyDelete
    Replies
    1. Sorry higher activity is not the benchmark for my stock selection

      Astec Life and TIL are already recommended stocks and not tracking the rest

      Delete
    2. Dear VP, Whats you take on Solar sector.? Moser baer & Indo Solar.? Worth to be in Portfolio amidst their weak fundamentals.?

      Delete
  8. sorry, sir i totaly disagree
    for ur this recom. coz there is no good epc, pe , book value and financial performanc. i want look still excel is cheap at 206. sory dear v.p.

    ReplyDelete
  9. I think, you will not post this message if you have read the last paragraph of my posting on Dion.

    No need to say sorry brother , there should be different opinion and I am not claiming that I am the only perfect and 100 % fool proof .
    If everyone stands on same opinion no trade will happen in any stocks.

    ReplyDelete
    Replies
    1. "If everyone stands on same opinion no trade will happen in any stocks." ... Very good reply Sir .. :)

      Delete
  10. VP Sir .. I believe your portfolio is the most diversified one i have ever seen (though i do not know the number of companies ). Based on your disclosures i believe so. And yet it will beat the conventional 25% CAGR norm convincingly. If you don't mind,can you share how many companies you hold in your portfolio. What % does the top 5 hold ? How small does you allocate capital in a company ? Do you do any incremental investments on your conviction plays based the improvement in a company's performance ? Very eager to understand your investment rationale ..

    ReplyDelete
  11. Dear Friend

    At least 10 times I clarified this matter. As you are aware if we contact with a company to get some clarification on any matter , their first question will be like this " Are you a share holder ,what is your foilio no /DP details ..etc " . In such a case to get a better communication with CS and enjoy the priority as a share holder ,in many cases I forced to buy few shares of every company before going deep into it . This situation will compel me to provide such a disclosure . Don't think one should invest in every company I recommended here . You study the company in detail and select few according to your conviction ,risk taking capacity ..etc. Personally I like a concentrated portfolio at present and it may change according to my age going forward.

    ReplyDelete
  12. www.moneycontrol.com website mange by dion global solution

    ReplyDelete
    Replies
    1. I don't know who is managing it but data syndication by Dion Global itself.

      Delete
  13. Hello sir,

    Please let me know if fresh entry can be made in nbcc....i saw your post very late on nbcc.....please guide....also share your views on grm overseas....

    ReplyDelete
    Replies
    1. Stock already appreciated 4 times from the recommended level . No comment about fresh entry.

      Delete
  14. wondering even after a revenue figure of 293 cr it is yet to make a profit.Can you touch this aspect of Dion ?

    ReplyDelete
    Replies
    1. Company spend lot of money for acquiring stake in various overseas companies in past few years . On the one side interest payment increased due to funding this and on the other side performance of such companies not improved as expected mainly on account of financial crisis . This situation is expected to change going forward . Revival in US and EU economies is expected to help report improving performance in future though it may not happen over night.

      Delete
  15. Can one enter Blue Star Infotech Limited at present price ??

    Rgds

    MP

    ReplyDelete
    Replies
    1. Stock already gained more than 150 % ,at CMP it depends on your risk taking capacity.

      Delete
  16. Dear vp sir, your opinion on TIL @ cmp430

    ReplyDelete
    Replies
    1. CMP Rs.430 , already recommended @ Rs.205

      http://value-picks.blogspot.in/2012/12/til-ltd-buy.html

      Delete
  17. VP sir whats your view on Rolta india,elnet tech,andhra petro,bhel,punj lloyd,essar oil

    ReplyDelete
  18. Sir any sujestion on Hanungtoys ?

    ReplyDelete
  19. Sir

    Are you tracking RS Software ,Please let me know your opinion .

    ReplyDelete
    Replies
    1. Not strictly tracking it . Vertical in which they are operating have good potential .But I am not sure why promoters are frequently trading in their own share .Really strange !!

      Delete
  20. Sir, are you tracking Bharat rasayan? What are your views on the stock?

    Also, how can we check the debt of a company from its balance sheet. I usually look for the Debt/Equity ratio, but that gets published only at the end of the FY. How can we get this information more often, at least quarterly? Thank you very much for your time and recommendations!

    - HS

    ReplyDelete
    Replies
    1. Bharat Rasayan is currently trading around Rs.430 which earlier recommended here @ Rs.80 in the below link

      http://value-picks.blogspot.in/2010/04/bharat-rasayan-buy.html



      Not easy to get debt details on a quarterly basis.

      Delete
  21. Sir, what is your view on Century Plywood. Please comment

    ReplyDelete
  22. Your views on Sonata Software please

    ReplyDelete
  23. Sir please let me know orchid chemical and Patel air temp are buy at cmp

    ReplyDelete
  24. i dont know for what reason my queries are omitted . however putting an another effort . can i buy RJ biotech at present ? beg your words

    ReplyDelete
    Replies
    1. Due to market lot concept in SME issues real investor's interest is very low in such cos. It can be bought only in a lot of 3000 shares.

      Delete
  25. VP Sir,

    Any views on sharon Bio Medicine

    #Deepak

    ReplyDelete
  26. Hi VP Sir,

    Thank-you for your commendable work in burning the midnight oil for us small investors - highly appreciated.

    I would appreciate if you could shed some light on a company called Mesue Kara Sungrace Mafatlal now christened Mynk 1906. The companys Revenue has shot up from 184.65 cr in 2013 to 665 cr in 2014 and NP at 0.83 cr in 2013 to 7.19 cr in 2014 on an equity base of 8.63 cr. The stock is still langusihing at Rs. 9=00.

    Would highly appeciate your input on this stock.

    Thanks and Regards - Micks

    ReplyDelete
    Replies
    1. If my memory is correct this is de-merged from Biogreen Paper. I am bit skeptical about its promoters .Chances for pump and dump can't ruled out in a bull market,may even give appropriate result to support the game plan

      Delete
  27. Sir what about nilkamal and bilcare. It is hold or sell?

    ReplyDelete
  28. Dear VP sir

    My apologies for posting this again. Would request your views on Dai Ichi karkaria and DH India and whether one can take an some exposure. Thank you sir

    Regards
    Shankar

    ReplyDelete
    Replies
    1. Not tracking Dai Ichi , DH India is a decent company ,may perform better when core industries tart to perform

      Delete
  29. Pls ans my question.
    Tell me your view on ultramarine and nahar spining for long term.

    ReplyDelete
  30. Sir,
    really cannot comprehend why Helios and Mathewson is not picking up when are others have rallied. recommend to hold or buy more?

    ReplyDelete
    Replies
    1. I have never recommended this stock in the past

      Delete
  31. VP sir, MM forgings is not moving up. Is this only for long term ? Any targets for short term ? Pls comment.

    ReplyDelete
  32. Dear VP, Kudos for your recommendations. I am a beneficiary of your blog. I turned into investor after njying the benefits of following your advise. God bless you.

    ReplyDelete
  33. hi sir,
    i would like to know about mahindra cie and voltas

    ReplyDelete
  34. Respected VP Sir
    Please share your views on Fedders Lloyd which in my views is a very good stock to buy at current levels of around Rs 72. The company has been performing very well and posted an EPS of Rs 16 in the previous accounting year. For the nine months ended March, 2014, it has posted an EPS of Rs 12. The full year results are expected to be better. The financial year of the company ends on June 30.The company has diversified business. At current levels, it is a very good buy for mid to long term and may see re-rating as the present P/E is less than 5.
    Please do share your views.
    Rakesh Gautam

    ReplyDelete
  35. Sir,

    Nath Bio-Gene upto budget was moving upward. But after budget going down. Any bad news for Nath Bio-Gene.
    Please give your valuable advice.

    Regards
    JD

    ReplyDelete
  36. Dear VP,

    I am sorry to trouble u with my 3 points for which I wrote to u on ur email address but alas no reply. Hope query on blog will get reply. I am keeping my fingers crossed.

    1) Dion - bought at 84 on Friday 11 jul after placing daily buy orders for 5 days, finally on 11 Jul 2014 got success & manged to buy 1000 @ 84.50, ONLY to realise that I was trapped as today from morning ONLY LC. Can U suggest what to do ? If it is going to drop still more then tomorrow morning I can sell it by taking loss raher than compounding the loss further.

    2) For First capital also today morning I was happy to be successful to buy 1000 shares @ 22, only to reaise that I was trapped as the talks on moneycontrol appears to suggest that

    3) for SJVN aperfect ideal dream company a MINI RATNA of Indian PSU, SUPERB FUNDAMANETALS but is being pulled down from Last 2 weeks, any idea on the call which one shd take

    I will be glad if u can answer the above 3 queries. Thank you VP.

    2)

    ReplyDelete
    Replies
    1. Reading your comment I believe you are not an investor and taking decision based purely on the price movements and not on the business of companies. Better to book loss ,please ignore my stock suggestion which is not suitable for those with such characteristics.

      Delete
  37. Sir..you didn't post my query that i had asked yesterday....kindly spare few minutes and do reply...would be really good to know your views. Advise on zensar tech

    ReplyDelete

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