Could be game changer, as samsung is big name and across 28 countries.
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Attended the con call. It was short one.
- cash on books 150 cr ( 270 Mcap).
-No plan to do buy back.
-Searching for ALM business. Dont want to give up on this.
-HRO growing at around 25% - Samsung is existing customer, no immediate revenue impact cause of the newspaper article.
-No one customer constitute more than 15% revenue , around 400 customer, hro and clm are fairly sticky business
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They classify their business in three category in quarterly report CLM, HRO, and ALM.
ALM is mostly dead. This growth they are talking about HRO only or overall growth of business.
Thnx
overall growth around 12-15% HRO is highest at 25%. They havent given up on ALM, and think it has potential.
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Does anyone have recording of last 2 concalls? Canât find on researchbytes.
They have weird way of doing concall where every line is open. Doesnt seem to involve any agency to conduct it.
Up 12% today. not sure what is the trigger.
Quess is acquiring Allsec.
open offer
acquirer - quess corp & person acting in concert
aquisition -
r jagadish from 19.93% to 2.5%
a saravanan from 20.42% to 2.5%
first carlyle 30.86% to 4.86%
open offer - mandatory reg(1) & 4 for takeover regulations
26% of voting shares
agreement - bpo services agreement dated 1-Apr-15 for outsorcing of payroll.Any view on acquisition by quess⌠Would this get merged with the entity ?
This seems to be a value-pick AGAIN now. FYâ20 consolidated EBITDA is 75.27 crs.
Also negligible debt with total cash and investments of arnd 159 crs.
At 7x EBITDA it comes out to be EV comes to be 526.89 + 159 = 685.89 crs.
Currently avlbl at EV of 115 crs.
The company is promoted by Quess Corp with Ajit Isaac serving as Chairman of this company.
In terms of MOAT, there are switching costs associated with outsourced payroll services. Overall margins seem to grow and stabilize in near-term.
Views invited.
Want to understand if my value-spotting is correct or wat the market is factoring in that Iâm not.
Disclosure :- No holdings yet.
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@hitesh2710 bhai, Are u still holding\tracking this company?
In light of new management, conneqtâs Coachieve business acquisition and future cross-selling opportunities with Quess, this seems like an undervalued bargain now. Wat say?
Allsec certainly looks cheap from valuations point of view and the business is more stable. After Quess acquisition, there is a lot of growth in HRO segment. Great thing is that they hardly need any additional capital to run or grow the business.
I posted some of my thoughts on Allsecâs business in my blog. Thanks.
Disclosure: I have minor tracking position at this point.
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@Justvenkys :- Are u still holding\following this? Still seems to be quite undervalued relative to the opportunity size, growth runway and now with promoter providing cross-selling opportunities.
Valuation :- On a normalized basis the co. has operating PAT of 36 crs. A multiple of 15 on this gives : - 36*15 = 540 crs.
Also the co. holds cash & cash equivalents of 169 crs. post dividend distribution. Adding that gives MCap of 540+169 = 709 crs. vs current mkt cap of 652 crs.
As mentioned in thr last con-call ADP inc. is globally most estd player in this industry & it currently trades at PE of 35. I have factored less than half PE of it on profits that also seem to be at the lower side.
Thoughts invited from other fellow investors tooâŚ
Disclosure :- Invested from lower levels. Have transacted in last 30 days.
PE without growth is a Ferrari without engine
My company uses allsec and its a low profile service IMHO
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no growth, low profile, boring service - jst the perfect Peter Lynch ingredients for perfect multibagger⌠
The period upto 2019 was under different promoters than from 19-20 onwards whn new mgmt took over hence theyâre not comparable. The entire thesis here is based upon this narrative only - one is paying zero growth multiple for a stock which has the few growth drivers in place now.
As far as scuttlebutt is concerned, yes, thrâs a low growth but a stable business with high switching costs. Iâve also dealt with them thru 2 of my last employers and both have Allsec as thr vendor for more than 11 yrs. now.
My views may be biased as my investment was frm very low levels & hv provided me with an 8% dividend yield. I now want to see this as a case of averaging up. Thanks for ur views BTW.
Disclosure : - As above
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And do you mind highlighting the performance of the new management from 2019 onwards?
Hope is not a strategy !
Probably i am wrong 
I wish you success and no more response on this thread from my end.
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Anybody looking for the growth in Allsec should read their investor presentation carefully. They have stated the order wins and pipeline.
Snippets from the presentation.
Regards,
Raj
Disc: Invested in last 90 days
@shardhr : I still hold Allsec and track it. They are doing decently in HRO segment. They are signing lot of new customers and it has to translate in to revenue in next few quarters. CLM business is doing ok, but not as good as HRO business.
From valuations point of view, it was cheap before. It moved up pretty quickly to 400-500 levels, probably because of marketâs expectation on promoters acquiring complete share of Allsec. Now, it doesnât look cheap for me. But it could surprise in short term because of some corporate action. So, this is a hold for me for now.
Disclosure: No transactions in last 30 days.
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