I guess numbers are not bad. We need to see whether this is a one time thing or a trend. Standalone revenue looks decent and degrowth is on consol basis.
I am pretty new to IT sector but if you look at major IT companies, the results are analysed from a Q-o-Q perspective. For companies that have most exposure to other countries, focus is q-o-q growth in constant currency terms.
Coming to Allsec, maybe we can give it some more leeway since it is more of a turnaround story with cheap valuations and decision should not be based on just 1 quarter.
What is the reason for de-growth in their consolidated revenue and pat on q o q basis? Pressure on foreign subsidiary operations due to INR depreciation?
Future plans to move on this higher yearly base i.e. where is next set of growth going to come from? New clients? Acquisitions? Plans to utilize cash? Dividends?
They are growing at tremendous pace on standalone basis. What is contributing towards this healthy growth? Is this sustainable?
How much MAT credit they are still left with? When are they going to start paying full tax? This will have a big impact on their PAT margins.
What are these 69 cr of current investments?
This is a very good story. But we need to assess whether this growth is sustainable. Stock is priced cheap without doubt at 7.9 trailing p/e. Discount cash and investments, it is even more cheaper.
Technically, stock has broken major support levels around 334-350. Head and shoulder target looks to be close to 260-275…with market at highs, and allsec stock being weak, it can fall more due to absence of any strong triggers in near term with overall market correction.
Thanks. And what about Trump’s backlash against outsourcing. As bulk of business is coming from USA. Will its US customers continue to outsource their processes to Allsec despite Trump’s attempts?
Not entirely sure, but they have a branch in Dallas as well. Maybe they are handling all American business in that office. Even if they are outsourcing these operations to India or Manila, I wonder how Trump would affect that.
Just posting a rough tech chart with support and resistance levels…still earning technicals, so correct me if i am wrong. Allsec, if breaks 336, could trigger a fresh rally, though trend reversal can only be confirmed if it breaches 350-360 and sustains. On the contrary, if it breaks sliding support line around 300-305, next support level is around 265-270.
That failed h&s that we were all excited about finally turned out to be a proper h&s just with two right shoulders. That setup the downtrend that allsec is in right now and its a solid one. However all trends end eventually and if the trend line gets breached and there are couple of higher lows above it then its would be a positive development
Recently two important and interesting things happened with the company
Strategic alliance with Kronos ( Kronos is the global leader in workforce management and develops solutions that are used by more than 30,000 organisations and 40 million users daily)
Kronos is growing pretty well and reported revenue for the year at $1.3 billion. EBITDA at $390 million
Interestingly jagadish ( CEO of Allsec) mentioned that
“The tie-up wouldinitially be restricted to Indian operations. But going forward itwould be forged for other geographies also, Mr Jagadish said statingthat the company planned to be in operation in atleast 40 countriesby March next year”
Secondly, Carlyle (PE promoter of Allsec), Bought Visionary Revenue Cycle Management, a provider of healthcare solutions supposedly for 420Cr
The unlisted company’s revenue was about $25 million and operating profit was $14 million.
There is a buzz that Carlyle may look at merging VRCM with another business process outsourcing company that it owns, Allsec Technologies, to build scale and later exit.
Recent results were also strong and a strong PE like Carlyle backed company which has shown promising turn around is available at ~10 P/E and with ~100cr Cash and short term investments in the balance sheet
Looks like a very interesting counter to keep track of!
