Datamatics Technologies Ltd.(DTL ) ,a pioneer in providing BPO and KPO solutions was incorporated in 1975 by Dr. Lalit Kanodia who is widely known as the founder of Indian IT Industry. Even before Dr. Kanodia got his Ph.D. from MIT he was selected as a member of the team that developed and designed the first two multi-user operating systems (CTSS & MULTICS), which were precursors to UNIX. His pioneering streak continued and, in 1967, Dr. Kanodia founded and headed Tata Consultancy Services TCS. History was created again when he founded Datamatics in 1975.Today Datamatics is ranked by NASSCOM as the 12th largest BPO company. With several innovations to its credit, Datamatics had the distinction of establishing the first satellite link from India to the USA (AT&T Bell Labs) in 1989 and boasts having initiated the “off-shore software factory” concept. The company has executed over 1100 projects in 58 countries for some of the world’s largest organizations, including five of the top ten Fortune 500 companies. Today, its employee strength is over 1600, spread across the continents. Datamatics Technologies operates in the following domains:
1) Document Processing 2) Finance and Accounting 3) Content Management and 4) Consulting Practice.
Datamatics Technologies Limited made an initial public offer in April 2004. The issue was subscribed 27 times, and the shares listed on BSE and NSE on May 7, 2004, at a premium of 77% i.e. at Rs. 195 as compared to the issue price of Rs. 110.But today the share is available at 50 % of its IPO price.
Company’s Financials are given below:
Scrip Code : 532528 Company Name : Datamatics Technologies Ltd
|Period Ending||30 Sep 07||30 Jun 07||31 Mar 07||31 Dec 06||30 Sep 06||31 Mar 07|
|No Of Months||3||3||3||3||3||12|
|Net Sales / Interest Earned / Operating Income||134.03||127.11||177.77||161.74||178.49||684.23|
|Profit Before Depreciation and Tax||35.65||29.58||72.47||58.90||69.52||257.69|
|Profit before Tax||24.77||18.90||62.34||49.17||59.47||217.86|
|Basic And Diluted EPS after Extraordinary item||–||0.39||1.41||1.16||1.42||5.10|
|Basic EPS after Extraordinary items||0.50||–||–||–||–||–|
|Diluted EPS after Extraordinary items||0.50||–||–||–||–||–|
|Nos. of Shares – Public||12,748,381.00||12,743,131.00||12,743,131.00||12,743,131.00||12,743,131.00||12,743,131.00|
|Percent of Shares-Public||31.31||31.03||31.30||31.30||31.30||31.30|
|Operating Profit Margin||26.60||23.27||40.77||36.42||38.95||37.66|
|Net Profit Margin||15.24||12.49||32.26||29.29||32.33||30.33|
Although the top line is showing a steady growth YOY, but the margins during the last 4 quarters have declined, probably because of Rupee appreciation. However, considering that the company is DEBT FREE and is sitting on cash worth Rs. 55 per share ( same as its CMP ),share which is avalable at P/E of less than 10 can be bought with one year HOLD.We expect company’s financial performance to improve, as 2008 and future years are going to be years of Knowledge Management where DTL has competitive edge over its rivals.
Buy at CMP of Rs. 50 is recommended with atleast one year HOLD.
This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information