BLUE STAR INFOTECH LTD (Rs 96)
(BSE Code- 532346 NSE Code- BLUESTINFO)
(P/E- 6.5, Market Cap- 96 cr. Dividend yield-5.2%)
Blue Star Infotech (BSIL) is a global provider of Product Development services, ERP solutions, Travel Technology solutions and Testing services. Part of the US$600M Blue Star Group, Blue Star Infotech provides profit-enhancing solutions to enterprises and product companies. With operations in North America, Europe, UK, Japan and India, Blue Star Infotech delivers high-performance technology-based services by adopting a partnering approach with its clients. Blue Star Infotech is a Microsoft Gold Partner and an Oracle Certified Partner. In December 2008, Blue Star Infotech completed 25 years of operations. Blue Star Infotech enjoys long-term relationships with most of its customers. It has a distinguished list of customers across different industries such as Manufacturing, Financial Services, Travel, Retail, Technology, Life Sciences and Engineering. Headquartered in Mumbai, India, BSIL has seven software development centers in Mumbai and Bangalore and serves its global clientele through offices in Santa Clara (CA) and Jersey City (NJ) in North America, London in UK, Helsinki in Finland and Tokyo in Japan. The Company also has business associates in USA and Europe
BSIL enjoys a 24-year old relationship with Hewlett-Packard, a Fortune 100 company and has been certified as a Hewlett-Packard's Developer and Solution Partner Program member. Some of the other major clients of the co. include names such as Hitachi Medical Corp., 3M, York Intl. Apart from these, BSIL has worked with organizations such as McDonald’s, Expedia.com,, Warner Brothers, NEC, European Parliament, HLL, United Breweries, Cipla, Raymond, amongst others
For the Q1 ended June 2009, BSIL has posted a 65% rise in net profit to Rs 2.5 cr. on net sales of Rs 33.81 cr. on consolidated basis. For the Q2 ended Sept. 2009, BSIL posted net profit of Rs 4.19 cr. (up 67% q-o-q) on net sales of Rs 33.78 cr. on consolidated basis. The half yearly EPS stood at Rs 6.70. For the year ended March 31, 2009, Consolidated Revenue stood at Rs. 155.03 cr., representing an increase of 8% over Rs. 143.56 cr. registered in FY08. Consolidated Net Profit for the year was Rs. 15.55 cr., representing a significant growth of 217% y-o-y. On a equity of 10 cr.(Promoters’stake-55.38%), the EPS stood at Rs 15.55 and the dividend declared was 50% (Rs 5 per share). The Company added 47 new customers during 2008-09 and initiated multi-year engagements with four leading companies from UK; a multi-billion dollar engineering company in US and a leading BPO service provider and one of the largest theatre chains in India. Based on current trends and industry outlook, BSIL hopes to improve its performance in the coming year. With its current focus on strengthening and increasing its sales and marketing efforts, it is well-positioned to capitalize on the expected turnaround.
BSIL’s financial position is strong with zero debt and Rs 23 cr. in cash/cash equivalents as on March 31, 2009. The steady flow of revenues from HP coupled with the increasing contribution of business from key clients provides significantly visibility in the company’s future revenues. At current level of Rs 96, BSIL trades at 6.5 times its FY09 earnings and looks attractive for the medium-long term. The BSIL share at current levels also offers an attractive dividend yield of 5.2%. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-45% over the next 6-8 months.
(BSE Code- 532346 NSE Code- BLUESTINFO)
(P/E- 6.5, Market Cap- 96 cr. Dividend yield-5.2%)
Blue Star Infotech (BSIL) is a global provider of Product Development services, ERP solutions, Travel Technology solutions and Testing services. Part of the US$600M Blue Star Group, Blue Star Infotech provides profit-enhancing solutions to enterprises and product companies. With operations in North America, Europe, UK, Japan and India, Blue Star Infotech delivers high-performance technology-based services by adopting a partnering approach with its clients. Blue Star Infotech is a Microsoft Gold Partner and an Oracle Certified Partner. In December 2008, Blue Star Infotech completed 25 years of operations. Blue Star Infotech enjoys long-term relationships with most of its customers. It has a distinguished list of customers across different industries such as Manufacturing, Financial Services, Travel, Retail, Technology, Life Sciences and Engineering. Headquartered in Mumbai, India, BSIL has seven software development centers in Mumbai and Bangalore and serves its global clientele through offices in Santa Clara (CA) and Jersey City (NJ) in North America, London in UK, Helsinki in Finland and Tokyo in Japan. The Company also has business associates in USA and Europe
BSIL enjoys a 24-year old relationship with Hewlett-Packard, a Fortune 100 company and has been certified as a Hewlett-Packard's Developer and Solution Partner Program member. Some of the other major clients of the co. include names such as Hitachi Medical Corp., 3M, York Intl. Apart from these, BSIL has worked with organizations such as McDonald’s, Expedia.com,, Warner Brothers, NEC, European Parliament, HLL, United Breweries, Cipla, Raymond, amongst others
For the Q1 ended June 2009, BSIL has posted a 65% rise in net profit to Rs 2.5 cr. on net sales of Rs 33.81 cr. on consolidated basis. For the Q2 ended Sept. 2009, BSIL posted net profit of Rs 4.19 cr. (up 67% q-o-q) on net sales of Rs 33.78 cr. on consolidated basis. The half yearly EPS stood at Rs 6.70. For the year ended March 31, 2009, Consolidated Revenue stood at Rs. 155.03 cr., representing an increase of 8% over Rs. 143.56 cr. registered in FY08. Consolidated Net Profit for the year was Rs. 15.55 cr., representing a significant growth of 217% y-o-y. On a equity of 10 cr.(Promoters’stake-55.38%), the EPS stood at Rs 15.55 and the dividend declared was 50% (Rs 5 per share). The Company added 47 new customers during 2008-09 and initiated multi-year engagements with four leading companies from UK; a multi-billion dollar engineering company in US and a leading BPO service provider and one of the largest theatre chains in India. Based on current trends and industry outlook, BSIL hopes to improve its performance in the coming year. With its current focus on strengthening and increasing its sales and marketing efforts, it is well-positioned to capitalize on the expected turnaround.
BSIL’s financial position is strong with zero debt and Rs 23 cr. in cash/cash equivalents as on March 31, 2009. The steady flow of revenues from HP coupled with the increasing contribution of business from key clients provides significantly visibility in the company’s future revenues. At current level of Rs 96, BSIL trades at 6.5 times its FY09 earnings and looks attractive for the medium-long term. The BSIL share at current levels also offers an attractive dividend yield of 5.2%. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-45% over the next 6-8 months.
Source: Internet (Valuenotes by Sanjay Chhabria)
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