ALLSEC Technology - BPO turnaround story


(csteja) #61

What does rental income mean here. Is it only for manila operations. Are they providing leased offices for rents ?
What could be the growth driver for domestic revenues ?


(tbhavesh) #62

I work with Accenture…

Disc : Invested. This is ~5% of my portfolio


(Bhaumik) #63

Rental income pertains to the spare capacity they had at Manila…from what i understand, they have now again started giving the spare capacity on rent from Nov onwards.


(Bhaumik) #64

From what i understand, Accenture is one of their biggest clients in HR payroll processing. Can you share with us, how has been ur experience with Allsec? Thx.


(tbhavesh) #65

My experience has been very good.


(csteja) #66

What are the growth drivers for allsec ahead ??Recent growth from US operations (from existing clients) is already priced in.

Amzn uses allsec as well. Personally, I dont like their interface. Also it is slow

Disc: Not invested


(Naz) #67

Hi csteja,
Can you please provide the source of info that Amazon uses allsec as well. Also, further growth drivers can be cross-sell of its products in existing client base (smartpay, FPS, APaaS).
Disclosure: Invested.


(csteja) #68

I work at amzn. They use allsec.


(Naz) #69

One investor with the name ‚ÄúSNEHAL BHUPENDRA SHAH‚ÄĚ seems to have entered in Dec-2016 Quarter with 1.75 lakh shares. Does anyone have any background on this investor ?

http://www.bseindia.com/corporates/shpPublicShareholder.aspx?scripcd=532633&qtrid=92.00&QtrName=December%202016


(sri krishna bhutra) #70

@hitesh2710 Sir, do you see any significant risk for Allsec due to Trump Government’s strict stance against IT and BPO companies. Also, considerable amount of Allsec’s revenue and profit is coming from USA.

Regards
Krishna


(ffaizan) #71

Blockbuster results… 9 months consolidated profit jumps 130%. Eps for 9 months is 30 rs compared 20 for full last year

http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/FA8F1536_943C_4BF9_8F60_46BDB8167552_171245.pdf


(Naz) #72

Profit (Dec-2016 Quarter): ~Rs. 17 Cr
Annualized Profit: ~ Rs. 68 Cr
Market Cap (today): 680 Cr
P/E (assuming 0% growth): 10x

Allsec seems to be turning around successfully. Increase in employee expenses in this quarter seems to be related to the expected business growth in coming quarters. With good growth in Dec quarter, we can expect strong growth in Mar, June quarters (since these are the strongest quarters in terms of revenues from new clients)

Also, company has been acquiring a strong set of clients in each vertical (vertical leaders) which is being reflected in its improving financials:

  1. Tata International (Tata Group Company): Using SmartPay solution
    https://www.allsechro.com/TILPayroll

  2. KPMG: using employee self service portal
    https://www.allsechro.com/kpmglogin/smartlogic

  3. More Retail Chain (Aditya Birla Group Company)
    https://www.allsechro.com/More/SmartLogic

  4. WellsFargo: Using Allsec’s web based Smartpay Payroll Service https://www.allsechro.com/WellsFargo

  5. Genpact Headstrong: using Allsec’s Payroll services
    https://www.allsechro.com/Headstrong/

  6. 21st Century Fox’s Star India Network (Star Plus, Star News, Star Vijya, Star Movies, Star Gold, Maa channels): using SmartPay network
    https://www.allsechro.com/starsouth

  7. BlueStar (India’s largest air conditioning (AC) company) : using Allsec’s SmartHR - https://hr.allsectech.com/BluestarHRMS

  8. Nucleus Software: Using Employee self-service portal
    https://www.allsechro.com/nucleuspayroll/

Disclosure: Hold significant portion of portfolio in Allsec


(Anand) #73

You missed out the below clients:

https://www.allsechro.com/Tescologin
https://www.allsechro.com/aircel/Common/web_Signon.aspx
https://smartpay.allsectech.com/accenturelogin/

Note: I hold.


(Hitesh Patel) #74

Company presentation on q3 fy 17 results.

India operatons seem steady, US is going well and Phillipines seems to be getting on track this quarter after a couple of lacklustre quarters. (for Philipines division).
allsec q3 fy 17 presentation.pdf (306.4 KB)


(Naz) #75

@ansii77: Thanks Anand. I am sure I must have missed out on many other names in my limited search. Tesco, especially, is a big name to boast, for any service provider.

Also, they seem to have forayed into two new verticals in the last quarter: 1) Healthcare Providers, 2) Healthcare Payors (Health Insurance Companies). Couldn’t locate Allsec’s clientele in these verticals.
These two services were not listed earlier and are new additions on their website.
https://www.allsectech.com/bpo-services-healthcare-providers
https://www.allsectech.com/bpo-services-healthcare-payors


(Arun Kumar) #76

The Company is not paying any tax? Can anyone throw light on this?
The EBITDA margin is also very high as compared to its peers. The US operations have contributed to the huge increase in profitability (zero tax??) while the drivers of that are not mentioned. And neither is there any mention of the number of employees/type of business. Would appreciate if somebody can post the detailed Company’s presentation.


(Anand) #77

Interesting deal…

Aon Signs Definitive Agreement to Sell Benefits Administration and HR Business Process Outsourcing (BPO) Platform

Provides for gross cash of up to $4.8 billion, including $4.3 billion in gross cash at closing


(Arun Kumar) #78

The Company’s EBITDA margins are higher than its peers. The peer Companies like First Source and Hinduja Global have more sticky and better quality customers leading to higher value BPO operations. The ALLSEC is low on quality, less sticky customers and despite that higher EBITDA margins. Very difficult to believe. The low (read zero) tax rate does raise lot of alarm bells in my ears. Appreciate some clarification on this.


(Anand) #79

Look into company’s history… The losses it has made and the reason for current turnaround… It’s easy to write-off without looking into the history and details…


(Arun Kumar) #80

Not writing off but the high EBITDA margin as compared to its peers and low/zero tax raises the concerns.