Accelya Kale Solutions-Niche & Sticky Business

(Mahesh Shah) #141

Hi Vaibhav,

Pain of the outgoing client might remain for two more quarters…Accelya is a niche player withsound business model…however, investment into Accelya, or for that matter any other stock, in current market sentiment should be made only for minimum2-3 years horizon…



Hi Mahesh,

Thx for reply.

I have made a client list of Accelya.


Air India

Air New Zealand

Bangkok Airways

Cathay Pacific

CEBU Pacific



Jet Airways

Korean Air

Malaysia airlines


Air mauritius

Kenya Airways




Gulf Air

Kuwait Airways

Oman Air

Saudi Arabian airlines


Aerolot (Russian airlines)








Turkish airlines

South America



Copa Airlines

Lantam Airlines(LAN/TAM)

North America

Air Canada

Canadian North

First Air

US Airways

Do you have any idea which client they have lost?

and which client they have added recently?




Demand for Air Travel Decelerates In March


Cargo Growth Trend Pauses

This and Air travel de-growthmay affect near term revenue?


FIrstCallResearch has come with target of 730…


Now airlines can evaluate interline performance at their fingertips with Accelyaâs new solution â eSpinâ


New product launched on april 23…

(Samarth Singh) #147

HI Mahesh,

Please could you tell me where you are getting the Accelya Group Consolidated Account details from?


**_ "The

_ Group.At _

inthe fees."


(Mahesh Shah) #148

Hi Samarth,

The details are from Annual Returns filed with respective company registrars…

To update, from filings it seems Accelya group has recently(in March’2014) raised largest debt ever in its history worth ~1200 cr. (US$ 150 mn.+ Euro 29.1 mn. term loans payable in 6 years). What is the reason of raising such debt remains unclear.


(Samarth Singh) #149

I am assuming you are getting this information from some proprietary database.

As far as the issue of the term loan - you should be able to get the expected sources / uses from the loan agreement (I assume you have access to that as you have access to their other documents).

recently(in mn.+ years).

(Mahesh Shah) #150

No Samarth…it’s from the respective country’s company registrar which anyone can access by paying fee…if you want I can mail you the respective ARs, just drop me a mail via valuepickr system…

Rgdg. Loan agreement, these are unlisted entities and they don’t have such strict compliance requirement…hence, such agreement is not in public domain.


(Max) #151

(Navtej Singh) #152 Link:

I was tracking the company untill i realized that the company paid more dividends than the net profit… maybe something i missed or Management wasnt vocal on the reason. I stop tracking after tat…

(Navtej Singh) #153 Link:

I was tracking the company untill i realized that the company paid more dividends than the net profit… maybe something i missed or Management wasnt vocal on the reason. I stop tracking after tat…

(Kunal) #154

Accelya Kale will pay high dividend at least for 2-3 years ahead. This is because it’s parents has global expansion plan and they are earning significant money from Accelya Kale. So it’s a business for those who love dividend.

Recent fair hike in train is positive sign for Aviation industry. Accelya Kale has also revenue sharing model which will fly high.

(Sunil) #155

Results out

Sales 72Cr June 14 vs 79Cr June 13

Net profit 18.4Cr vs 18.9Cr

EPS 12.37 vs 12.69

(Mahesh Shah) #156

Q4FY14 (June ending) revenue degrowth in INR terms was (7.87) % YoY whereas it was (9.02) % in constant currency terms. Next two quarters will be key monitorable as actual degrowth (in constant currency terms) started from Q1FY14. EBITDA margins at just below 40 % seems to be the new normal for AccelyaKale which seems to be ok. Growth path has to be revived for any sort of rerating to take place. Dividend yield will continue to remain good because of 100 % payout policy of parent. Till some clarity on significant external debt raised at parent level emerges or growth revives will look to accumulate below only 600 levels.


Discl. - Negligible holding for tracking purpose

(N Sood) #157

Mahesh, do you still hold DFM foods ( or Tata Global). both do not seem to be moving for a few years now.

Westbridge recent purchases like la opala , dfm (or mayur) are not really at cheap valuations

(Mahesh Shah) #158

Hi N Sood,

Yes still Hold DFM & Tata Global from long term point of view…although very much disappointed with the management strategy of DFM (waiting for growth for augmenting capacities and instead of introducing products in other categories going for expansion of natkhat brand) and static behaviour of TGBL…


(Varadharajan Ragunathan) #159


thinking if I should look at adding to my position in this. I love this business, high margins, sticky business and a large moat. Question is that of revenue growth and given the clean, ethical track record and a good name, we have to back the management on this.

Given the one time revenue recognition of Rs. 15 Cr. that happened in march, the next quarter will be crucial to get a grip on if the company’s traction.

Any insights from industry experts ?

(Venkatesh) #160

At current price Rs632 stock has 7.8% dividend yield, P/E 12.4, RoE 72%, RoCE pre tax 100%, ROCE (ex balance sheet cash) = 265%. on FY14 number after removing one off Rs15crs from numbers.

This is a steal unless someone can point out any (1) corporate governance issues or (2) can prove the business will shut down soon.

Given lack of sales growth this will take time to perform. But for a patient investors 50%+ returns seems very likely.