Dividend announcement possible on 8th of Jan. I have been following RS Software for about 3-4 quarters now, I am impressed by their timely results announcement, within 2 weeks of the quarter ending, they come out with results, any investor would love that discipline.
Though delivery volumes have been low but there has been a rise today in volumes…expecting qood q3 results and a dividend …will trade in 210-220 in few days…
Hi,
In my opinion, even if the company posts good results, dividend payout will be a major boost for the stock. It will reflect better quality of earnings for the stock.
Stock at 202 with good volumes.Maximum probability of Dividend declaration on 8th jan…this will take it to 220+
Guys, I spoke to Mr. Anandya Sen who looks after Investor Relations in the company. I asked him about the reason for not paying dividend in the last quarter despite pretty good results and cash sitting on balance sheet. He told me to drop a mail regarding all thequeries I have.We can prepare a questionnaire and drop a mail to him.Please pitch in all the questions that you all have regarding the company. Will drop a mail to him by tomorrow morning.
Hi Ankit,
Here is what I would like to ask-
-
Despite good profits & cash balance & minimal need of capex, why was dividend not paid after 1H results?How is themanagement planning to utilize cash?
-
What percentage of your total costs is in foreign exchange? ( Would like to know this toget an idea of what will happen if INR improves… Rough calculations point out that about 75% of costs is non-INR, still better to get exact numbers)
3)How is the business environment for the company? What kind of growth are you expecting in next 2-3 years?
is the company planning/working on expanding to other domains eq.manufacturing or retail or payment seems to be the focus?
What kind of employee addition we are looking for next year? Current Employee Strength? Number of net additions for this year?
What is current employee utilization rate?
Ratio of offshore vs. onsite employees?
Scope for improving margins going forward? What kind of margins we are targeting going forward?
Percentage contribution to revenue from newly added clients( I believe we added 4)? What could be the contribution from these clients in next 2-3 years?
Any company in India which is a seriouscompetitor in payments space? How are they growing in payment space? Any other niche players in this space?
Their view on payment space for next couple of years.
Hi Guys,
Have sent them below written mail:
Dear Mr. Sen,
We are a group of minority investors and have been following the company for quite a long time. It was pleasure talking to you on January 3, 2012. As discussed, we had some queries regarding the company and would like the company to address it:
- What differentiates the company from other large and mid tier Indian IT companies (company’s USP vis-a-vis other IT companies)? Is there any other niche player in India which competes directly with our company in payment space?
- How is the business environment for the company in the current year (since lot of other IT companies are seeing serious pressure on sales and margins)? What kind of growth are we expecting in next 2-3 years?
- How is the pricing decided for the company? Do we work on fixed prices or variable ones (depending on foreign exchange)?
- What is the margin expectation for current year and next year?
- What is company’s order book (confirmed orders) as on date? How much of that are expected to be completed in current year and FY 14?
- Since Visa is our largest client, how have we been able to retain it for more than 10 years?
- Apart from our company, which other IT companies (domestic and international) serve Visa?
- What are we doing to reduce our dependence on Visa? What is the contribution to revenue from newly added clients( I believe we added 4)? What could be the contribution from these clients in next 2-3 years?
- Is the company planning/working on expanding to other domains egmanufacturingor retail or payment seems to be the focus?
- What is the current employee strength of the company? What is the number of net employee additions for the current year? Whatkind of employee addition are we looking for next year?
- What is the current employee utilization rate? What is the ratio of onshore and offshore employees?
- What percentage of your total costs is in foreign exchange? What is our foreign exchange management strategy? Do we hedge our foreign exchange receivables?
- Despite good profits & cash balance & minimal need of capital expenditure, why was dividend not paid after H2 FY 13 results?How is themanagement planning to utilize cash?
It will be great if you could reply to our queries as early as possible. Eagerly awaiting your reply.
Hope I have covered all the relevant questions. Will update you once I receive their mail.
Ankit ji,
Really appreciate your effort in compiling all these questions which when answered shall provide valuable insights abt the growth plan and give us a fair idea. This is a robust company and is probably the best indian company in payment domain. There are some operators who manipulate the stock prices before the results leading to price volatilty…with monetary transactions on the rise every second it is having a strong base which can only expand from here considering the increasing usage of online payment.
Thanks Ankit for putting the questions in a very good and logical order
Rajarshi, No need to call me ji… Just call me Ankit. Even I agree with you that the company’s results have been pretty good. But as it is a small cap company we need to know more about it. Will post their reply as soon as I get it. Hope tomorrow’s results reflect our confidence in the company.
ok ankit…it’s just a tradition to address some one as ‘Name’ Ji…anyways i concur with you nd results will be good…
Rajarshi
Ankit ji,
Really appreciate your effort in compiling all these questions which when answered shall provide valuable insights abt the growth plan and give us a fair idea. This is a robust company and is probably the best indian company in payment domain. There are some operators who manipulate the stock prices before the results leading to price volatilty…with monetary transactions on the rise every second it is having a strong base which can only expand from here considering the increasing usage of online payment.
Rs software standalone profit up by 12% as compared to Dec 2011 and DEPS down by -2.15%. (from 6.97 to 6.82)
It is not good result even if compare to sep 12 results also. Generally Q3,Q4 quarters are good for this company but this time it seems not good. Any specific reasons behind DE growth of EPS?
Views are invited
I had found RS Software name under the list of companies having corporate governance issues in Moneylife…I do hold this stock and am pretty disappointed by their latest results
These are all the links where moneylife mentioned RS software. It has always been bullish on this one excpet in the last link, wherein it went out of their valuepicks list due to rise in price. No corp governance issue mentioned anywhere. Can you provide the link?
http://www.moneylife.in/article/rs-software-on-a-comeback/26629.html
http://www.moneylife.in/article/change-in-the-air/27873.html
http://www.moneylife.in/article/moneylife-a-value-pick/27221.html
Hi,
Update of results:
RS Software came up with its results yesterday and they were prettydisappointing. I will analyse company’s consolidated financials. Company’s topline increased by 4.6 per cent yoy (there is a decline in dollar terms since depreciation of rupee has happened as compared to last year), while there is a decline by 8.9 per cent qoq basis. The employee cost has increased by 21 per cent yoy which along with lower revenues have led to decline in company’s operating margins to 13.4 per cent in Q3 FY13 as compared to 16.5 per cent in Q3 FY12 and 17.5 per cent in Q2 FY13. Decline in margins has led to decline in PBDIT of the company to Rs.9.49 crore as compared to Rs.11.13 crore in Q3 FY12 and Rs.13.6 crore in Q2 FY13. However, lower tax payout along with other income of Rs.2.06 crore in this quarter has led to PAT growth of 11.66 per cent yoy to Rs.8.5 core while the PAT has declined by 10 per cent qoq. In my opinion, what is worrying is the decline in dollar revenue yoy along with marginsuppression. I have spoke to the management and have requested them to reply to my questionnaire that I had sent on last Friday. Will again follow up with them tomorrow.
My experience with anindya sen is that he asks for questionnaire but does not reply. I hope he does this time.
It used to regularly feature in their list of recommended companies along with other companies have corporate governance issues…havent seen it being mentioned by the mag in the past 2 issues…
Exitted the stock primarily because at this stage Nucleus Software and Infinite Computer look better options. And with the current results it would trade in a range till some new information comes.
They should do 30 EPS in FY13 which puts them at PE of 6. The hiring ads or linkedin profiles which were major triggers for me to get in last year do not seem to be there now. Also the management was hiking their stake and also warrants were done to get some stake when there was no need of money. Such triggers now are gone.
I dont think they reply to mails so probably the answer to the questionnaire might not come.
The corporate governance issue is obviously something which a few people raise without anything concrete so I guess that can always be ignored.
Infinite Computer at this stage is with a better visibility via concalls etc. and have a clear guidance of 20% profit growth. Plus with Rs. 40/share cash and a dividend of Rs. 6 and at CMP 128 provides a better margin of safety. Their last qtr results were also subdued due to forex loss they had booked which typically is not the case.