Prithvi Information Solutions: Quick turnaround
The mind-boggling Q1FY10 results of Prithvi Information Solutions Ltd. (PISL) (Code: 532675) (Rs.71.05) went unnoticed by marketmen. The company posted a net profit of Rs.17.6 cr. against a net loss of Rs.7 cr. in Q1FY09. PISL is an IT enabled services provider with four segments-technology outsourcing, business intelligence, network solutions and KPO (knowledge process outsourcing). Incorporated in 1998 as Prithvi Information Solutions Pvt. Ltd. in Hyderabad, it was converted into a public limited company in 2000. PISL started its business in 1998 with outsourcing contracts for offshore soft ware development and has over the years evolved into an outsourcing service provider with a number of services. Promoted by Ms. Madhavi Vuppalapati and Mr. Satish Kumar Vuppalapati, it tapped the capital market in July 2005 with an IPO of 50 lakh shares at Rs.270 per share.
PISL is now a global provider of customised solutions and software services to clients in USA. It provides software solutions across a host of technologies and platforms. Its scale of operations is such that it has 6 offices in USA alone, one each in the UK and Singapore, besides two global delivery centres in Hyderabad and one in Bangalore. Other representative offices are in Bahrain - Middle East, Johannesburg - South Africa and Brazil - South America. PISL has domain expertise in various sectors such as Banking, Financial Services & Insurance (BFSI), Technology,
Telecom, Healthcare, Manufacturing and E-governance. Basically, it has three strategic business units – technology outsourcing, process outsourcing and intelligence solutions, jointly addressing a wide spectrum of clients.
Some of its clients are Fortune 500 companies with 15 big ticket clients with over US $10 billion in sales. Its main clients are John Hopkins, T-Mobile, PNC Bank, Pittsburg Medical Insurance, Meckson Pharma and Pittsburg Plate Glass of USA. PISL’s service offerings span the complete software lifecycle including consulting, architecture, development, testing, maintenance, migration, re-engineering and integration services.
The mind-boggling Q1FY10 results of Prithvi Information Solutions Ltd. (PISL) (Code: 532675) (Rs.71.05) went unnoticed by marketmen. The company posted a net profit of Rs.17.6 cr. against a net loss of Rs.7 cr. in Q1FY09. PISL is an IT enabled services provider with four segments-technology outsourcing, business intelligence, network solutions and KPO (knowledge process outsourcing). Incorporated in 1998 as Prithvi Information Solutions Pvt. Ltd. in Hyderabad, it was converted into a public limited company in 2000. PISL started its business in 1998 with outsourcing contracts for offshore soft ware development and has over the years evolved into an outsourcing service provider with a number of services. Promoted by Ms. Madhavi Vuppalapati and Mr. Satish Kumar Vuppalapati, it tapped the capital market in July 2005 with an IPO of 50 lakh shares at Rs.270 per share.
PISL is now a global provider of customised solutions and software services to clients in USA. It provides software solutions across a host of technologies and platforms. Its scale of operations is such that it has 6 offices in USA alone, one each in the UK and Singapore, besides two global delivery centres in Hyderabad and one in Bangalore. Other representative offices are in Bahrain - Middle East, Johannesburg - South Africa and Brazil - South America. PISL has domain expertise in various sectors such as Banking, Financial Services & Insurance (BFSI), Technology,
Telecom, Healthcare, Manufacturing and E-governance. Basically, it has three strategic business units – technology outsourcing, process outsourcing and intelligence solutions, jointly addressing a wide spectrum of clients.
Some of its clients are Fortune 500 companies with 15 big ticket clients with over US $10 billion in sales. Its main clients are John Hopkins, T-Mobile, PNC Bank, Pittsburg Medical Insurance, Meckson Pharma and Pittsburg Plate Glass of USA. PISL’s service offerings span the complete software lifecycle including consulting, architecture, development, testing, maintenance, migration, re-engineering and integration services.
For FY09, PISL had posted 42% lower net profit at Rs.36.7 cr. on 78% higher sales of Rs.1976 cr. For Q1FY10, sales went up by 2% to Rs.388 cr. and net profit was Rs.17.6 cr. against a net loss of Rs.7 cr. in Q1FY09. Its equity capital is Rs.18.1 cr. and with reserves of Rs.405 cr., the book value of the share works out to Rs. 234. The promoters hold 32.6% in the equity capital, foreign holding is 9.2%, PCBs hold 15.2% leaving 42.6% with the investing public.
Last year, PISL acquired Effigient, USA for $1.89 million. Effigent’s niche consulting business division is an Apple Professional Services partner that provide consulting services in the areas of Apple and Open Source technologies that address the growing demand for IT services for the Mac OS X platform and related technologies. It also acquired assets of Strategic Research and Development Group (SRDG), USA at US $0.85 million. SRDG provides high-end consulting in business transformation services with IBM as a partner and directly to customers such as Fireman's Fund, AIG and the Citigroup. These strategic acquisition augment PISL’s IT services portfolio and strengthens its competitive position by offering clients the opportunity to seamlessly develop and deploy Mac based applications into their enterprise solutions portfolio. PISL is actively looking for further acquisitions in USA and the Middle East. It has a well-planned strategy to diversify geographical presence by foraying into the high-growth regions of India and the Middle East. PISL has also entered the high-end Knowledge Process Outsourcing (KPO) segment and has a significant presence in the Network Solutions space. With India well-positioned to seize a major chunk of the KPO pie, PISL stands to gain by its diverse offerings and early mover advantage. KPO is expected to be a $17 billion industry by 2010 and India hopes to
garner a whopping 70% share of the global market at $12 billion. KPO encompasses the whole gamut of higher valueadded knowledge services such as investment research, biotech research, engineering research, complex analytics, patent filings, legal outsourcing, etc. PISL was ranked as the 14th largest IT service exporter in India in FY08 by NASSCOM and Deloitte’s Technology Fast 50 India in 2008. Its recent focus to develop network solutions and KPO can reap a rich harvest in the next 2-3 years. Moreover, an increase in its offshore revenues will help realize strong returns. For FY10, net profit is expected to be Rs.55 cr. on sales of Rs.1800 cr., which would give an EPS of Rs.30.4. At the CMP of Rs.71, the share is trading at a P/E of 2.3 on its FY10 estimated EPS of Rs.30.4. The share is recommended with a target price of Rs.120 at which it would trade at a conservative P/E of 4. The 52-week high/low of the share has been Rs.146/30.
Last year, PISL acquired Effigient, USA for $1.89 million. Effigent’s niche consulting business division is an Apple Professional Services partner that provide consulting services in the areas of Apple and Open Source technologies that address the growing demand for IT services for the Mac OS X platform and related technologies. It also acquired assets of Strategic Research and Development Group (SRDG), USA at US $0.85 million. SRDG provides high-end consulting in business transformation services with IBM as a partner and directly to customers such as Fireman's Fund, AIG and the Citigroup. These strategic acquisition augment PISL’s IT services portfolio and strengthens its competitive position by offering clients the opportunity to seamlessly develop and deploy Mac based applications into their enterprise solutions portfolio. PISL is actively looking for further acquisitions in USA and the Middle East. It has a well-planned strategy to diversify geographical presence by foraying into the high-growth regions of India and the Middle East. PISL has also entered the high-end Knowledge Process Outsourcing (KPO) segment and has a significant presence in the Network Solutions space. With India well-positioned to seize a major chunk of the KPO pie, PISL stands to gain by its diverse offerings and early mover advantage. KPO is expected to be a $17 billion industry by 2010 and India hopes to
garner a whopping 70% share of the global market at $12 billion. KPO encompasses the whole gamut of higher valueadded knowledge services such as investment research, biotech research, engineering research, complex analytics, patent filings, legal outsourcing, etc. PISL was ranked as the 14th largest IT service exporter in India in FY08 by NASSCOM and Deloitte’s Technology Fast 50 India in 2008. Its recent focus to develop network solutions and KPO can reap a rich harvest in the next 2-3 years. Moreover, an increase in its offshore revenues will help realize strong returns. For FY10, net profit is expected to be Rs.55 cr. on sales of Rs.1800 cr., which would give an EPS of Rs.30.4. At the CMP of Rs.71, the share is trading at a P/E of 2.3 on its FY10 estimated EPS of Rs.30.4. The share is recommended with a target price of Rs.120 at which it would trade at a conservative P/E of 4. The 52-week high/low of the share has been Rs.146/30.
Source: Internet (Moneytimes)
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