3i Infotech, a company that has struggled for over a decade, has finally turned a corner and is now on a growth trajectory. However, due to past accumulated losses, the true picture of the company's turnaround was not reflected in its financial statements. To address this issue, the company carried out a reduction of capital and subsequent consolidation, resulting in a profitable company with positive reserves. Despite this positive development, confusion in the market has led many investors to sell the company's shares, creating a price/value mismatch. The stock is currently trading at an ultra-deep value, which presents a unique special situation opportunity for investors .
Under the leadership of its new CEO, Mr. Thompson, and with orders from RailTel Wifi Monetisation, NureTech, Resident Entrepreneurs, 3i Infotech is poised for success.With an employee base of 6,000, which is more than the needed headcount, the company is well-placed to benefit from Operating Leverage, High Sales Growth and Margin Expansion, Company is well set to double its revenues over the next 3 Years.
The company aims to become a $1 billion company by 2030, and even if it achieves half of that, there is potential for significant re-rating of the stock. However on the worst case scenario, Current valuations are such that, we might end up in a value trap, providing enough margin of safety on Invested capital.
