Accelya Kale Solutions-Niche & Sticky Business


(Kunal) #121

Last month I calculated Accelya’s Intrinsic Value using DCF method. Fair value comes to 900. There will be interesting movement ahead as one can see small cap IT stocks are on joyride since last some days.

If yourquery is relatedto notfactored insale sodespite


(Kunal) #122

Interesting read for IT sector investors

http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/seven-most-active-technology-investors-in-india/articleshow/27992374.cms Link: http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/seven-most-active-technology-investors-in-india/articleshow/27992374.cms

“The time to invest in India is now. This is like the 1997 was in Silicon Valleyajust before the big boom,” said Vivek Wadhwa, a vice president of research and innovation at Singularity University in the United States. Until the end of November, $ 1.3 billion (Rs 8,000 crore) of risk capital has been invested in Indian technology companies according to consultancy EY. While new entrants have made a splash, the rising buzz is led by the bold bets being taken by a few global venture funds that have had a ringside view of the sector for nearly a decade now.


(Mahesh Shah) #123

My Q2FY14 (June'ending) estimate for AccelyaKale (Consolidated) is provided below :

( fig. In Rs. cr. )

Q2FY14e (Dec.'13)

Q2FY13 (Dec.'12)

Revenue

71.8 â 76.2

74.3

EBITDA

31.8 â 33.8

33.23

PAT

19.4 â 21.1

20.94

( fig. In Rs. cr. )

Q2FY14e (Dec.'13)

Q2FY13 (Dec.'12)

Revenue

71.8 â 76.2

74.3

EBITDA

31.8 â 33.8

33.23

PAT

19.4 â 21.1

20.94


(Kunal) #124

Mahesh,

More or less your estimates are flat. Will you keep holding for such performance / accumulate more or sell gradually ?

Kunal


(Mahesh Shah) #125

Kunal…as I have said before too, FY14 is a testing fiscal for Accelya…it’s a transition period wherein a significant client is phased out…I would like to closely watch this period as otherwise story is compelling…rgdg. my holding, again as I have said before, I will sit tight till 880 at which level I might consider some profit booking…in case of a fall, I am willing to accumulate more…I don’t consider current rate as a price to sell my holding…however, I always monitor every development closely and reassess my view based on each development…so, kindly take your own call based on your assessment.

Rgds.


(Mahesh Shah) #126

Accelya Group nominated forAir Transport News Awards, 2014 under the category ‘IT Company of the year’…SITA was the winner last year while Amaedus was the winner in 2012…

Rgds.


(Mahesh Shah) #127

Accelya Group FY13 Consolidated Accounts are out yesterday....Now, we have the complete picture....providing updates below :

Accelya Group Consolidated :

( in Euro cr. )

FY13

FY12

FY11

FY10

FY09

FY08

Equity

0.71

0.70

0.64

0.64

0.64

0.64

Total Debt

3.22

4.49

7.35

6.63

6.78

6.78

External Debt

0

1.49

2.68

4.24

4.45

4.72

CPEC

3.22

2.97

2.53

2.39

2.16

1.86

Revenue

10.07

8.93

5.55

5.23

5.63

5.34

EBITDA

4.55

3.58

2.44

2.33

2.70

2.23

PAT

(0.98)

(0.44)

1.04

(0.11)

0.30

0.88

Employees

2154

2167

585

608

609

660

Revenue per employee

46793

41209

94871

86019

92446

80909

OCF

3.79

2.33

1.49

1.77

2.25

0.23


AccelyaKale's contribution to Group in FY12 & FY13 :

India

India

Accelya Kale Solutions Ltd.

( FY13 )

Accelya Kale Solutions Ltd.

( FY12 )

Contribution to :

Group's Revenue

37 %

33 %

Group's Profits

36 %

23 %

Group's Fixed Assets

35 %

36 %

Group's Total Employees

74 %

74 %

Revenue Per Employee

(in INR cr.)

0.19

0.14

EBITDA Margin

42.90 %

29.75 %

OCF/Sales

0.36

0.26

Dividend Payout Ratio

100 %

100 %

Sales/Fixed Assets

6.19

5.08

External Debt

Negligible

Negligible


AccelyaKale's FY13 Annuity Revenues extracted from Group Accounts :

FY13

FY12

FY11

FY10

FY09

FY08

FY07

FY06

FY05

FY04

FY03

FY02

FY01

Airlines Segment

(INR cr.)

308.62

229.59

180.50

126.73

102.62

86.18

79.50

61.99

48.05

37.61

34.78

30.42

11.84

Annuity based

(INR cr.)

289.03

209.65

149.81

104.58

85.78

71.14

60.11

45.17

39.45

26.27

21.44

12.72

1.37

Employees

1595

1602

1392

1403

1310

1260

810

759

660

359

311

250

126

YoY Gr. In Rev.- Airline

36.16 %

25.56 %

42.43 %

23.49 %

19.07 %

8.40 %

28.24 %

29.01 %

27.75 %

8.13 %

14.33 %

156.92 %

25.55 %

Annuity Contribution

93.65 %

91.31 %

82.99 %

82.52 %

83.58 %

82.54 %

75.61 %

72.86 %

82.10 %

69.84 %

61.64 %

41.81 %

11.57 %

Rev. Per Employee (INR Lacs)

19.34

14.33

12.96

9.03

7.83

6.83

9.81

8.16

7.28

10.47

11.18

12.16

9.39


(Mahesh Shah) #128

Key Takeaways from Accelya Group Consolidated Accounts :

(1) Series 4 CPECs were issued in FY13 which mature in 2041…To sum-up, all CPECs have maturity ranging from 2036-2041 and earn 7.75 % p.a.

(2) Series 2 & series 3 warrants were issued in FY13…Series 2 warrants were issued without any consideration…Terms & Conditions of the warrants were amended in July 2013 to suit the benefits of warrant holders in case of an exit event i.e. sell-off.

(3) Loans are totally paid off well ahead of due date which was January 2014…External Debt now stands nil.

(4) AccelyaKale is the main vehicle for group’s Asia, Middle East & Africa sales with almost 90 % of the group’s revenues from this region booked under AccelyaKale.

(5) Management confirms consideration of various options including complete sell-off in the Annual Accounts. Reproducing below the exact wordings taken from the FY13 Group AR :

"The company and its main shareholders have been considering in the past months their strategic alternatives. Those include the potential sale of the control of the company, the sale of certain assets of the company and the possible re-leveraging of the Group.

At this stage, no decision has been made, but there remains essentially two credible alternatives being on the one side the sale of the company shares to a third party and the re-leveraging of the Group. At this stage, none of these alternatives would result inthe company bearing material advisor fees."


(Mahesh Shah) #129

Results declared…interim dividend of rs. 27 announced…

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Accelya_Kale_Solutions_Ltd_050214_Rst.pdf

Results on expected lines…good to see that impact of client loss is getting negated by new business momentum…positive for the long run…liberal dividend policy continues and is expected in future too as cash will be distributed before sell off which is confirmed by the parent in its AR…

Rgds.

Discl. - Hold


(Atul Garg) #130

Mahesh,

Thanks for the regular updated esp on the parent Accelya. Not sure what is the meaning & interpretation for the first two points related to CPECs and warrants, if you can decipher for us.

The results are subdued but on expected lines. The big customer exit should have been completed in this quarter (need to confirm from mgmt), so going forward should hope for up trend. The key things to note are

Sustainability of revenues despite a big customer exit.

prudent capital allocation by distributing it to share holders when growth is muted (this will help in keeping the roE at healthy levels)

Thanks.


(Kunal) #131

Bangkok Airways outsources critical financial processes to Accelya -

See more at: http://www.myiris.com/newsCentre/storyShow.php?fileR=20140304123727717&dir=2014/03/04#sthash.QyzoHT9T.dpuf


(Kunal) #132

Some of the interesting states for AccelyaKale

Stock Returns of last

3m : -5%
6m : 29%
1yr : 118%
5yr : 2971% (CAGR 98% !!)

Also last 5yr EPS growth is CAGR 45%

Despite strong multifold return, AccelyaKale is trading below 14 PE today.(against industry avg of 21 PE)

Kunal


(Mahesh Shah) #133

My Q3FY14 (Mar.14) estimates for Accelya Kale :

( fig. In Rs. cr. )

Q3FY14e (Mar.'14)

Q3FY13 (Mar.'13)

Revenue

82.1 â 86.8

78.86

EBITDA

35.1 â 36.5

35.92

PAT

25.5 â 27.6

24.31


(Kunal) #134

Indian IT players gear up as contract worth $113 bn up for renewal

Indian IT companies might end up with a smaller share of a bigger pie as more IT contracts are being restructured if they are not cautious, warn analysts

Indian IT companies might end up with a smaller share of a bigger pie as more IT contracts are being restructured if they are not cautious, warn analysts.

)—

Demand for niche segment player increase as corporates now prefer to distribute IT fund to several companies - expert in respective area / technology


(Kunal) #135

Niche players like IPsoft & LiquidHub eating into outsourcing pie of companies like HCL & Accenture - The Economic Times on Mobile

http://m.economictimes.com/tech/ites/niche-tech-companies-eat-into-outsourcing-pie/articleshow/33793259.cms

Interesting for small but niche players like Accelya Kale, RS software etc


(Mahesh Shah) #136

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Accelya_Kale_Solutions_Ltd_300414_Rst.pdf

If we exclude one-time revenue recognition due to termination of contract then topline of 74.58 cr. is slightly below the estimates…

Rgds.


(Kunal) #137

Link: http://www.bseindia.com/xml-data/corpfiling/AttachLive/Accelya_Kale_Solutions_Ltd_300414_Rst.pdf http://www.bseindia.com/xml-data/corpfiling/AttachLive/Accelya_Kale_Solutions_Ltd_300414_Rst.pdf Link: http://www.bseindia.com/xml-data/corpfiling/AttachLive/Accelya_Kale_Solutions_Ltd_300414_Rst.pdf

That is the reason today stock is -5% bearish.

I have not taken any call after yesterday’s result.

It should provide attractive buying opportunity during few months.


(Aksh) #138

Company has said in the clarification that the revenue recognition is on account of termination of contract by a major customer…Any idea who’s this customer and what would be the impact of this on the business going forward?


#139

Hello valuepickrs,

Is the growth still there? Is the long term story still intact?

For last some quarter result have been flat…Last quarter, result was good because of one-time revenue recognition. what is the estimates of this quarter?

Have they added new clients? or have they launch any new product?

Price have corrected sharply recently…so good time to enter if fundamentals are good?

Regards,

vaibhav


#140

Hi Kunal,

Could you share how you calculated the fair value to 900?

thx

vaibhav