Datamatics: CMP 55, MCAP â 321 Cr
Datamatics is a Mumbai based KPO/BPO catering to several Fortune 500 Companies globally for managing their End-to-end Application Life Cycle & Business Critical Processes With delivery centers in India at Ahmedabad, Mumbai, Nashik, Delhi, Bangalore, Chennai and Puducherry.
Datamaticsâ portfolio of integrated offerings comprises of Finance & Accounting Services, Publishing Services, Research & Analytics, Document Management Services, Information Management Services, IT Consulting, IT Services, Engineering and Embedded Services. In addition, the Company also offers a portfolio of solutions comprising of Billing & Payment Solutions, eRetail Solutions, web enablement, portal solutions, etc. The Company is also expanding its geographic footprint. The majority of Datamaticsâ revenue coming from BPO- Finance & Account; Document Processing; Publishing; Research & Analytics, Software - IT Solutions; Engineering Service and Billing Solutions.
The Company has the following Indian subsidiaries (including
the step down subsidiaries) as on March 31, 2013:
1. Datamatics Software Services Limited
2. Datamatics Vista Info Systems Private Limited
3. CIGNEX Datamatics Technologies Private Limited
4. Cybercom Datamatics Information Solutions Limited
The Company has the following overseas subsidiaries
(including the step down subsidiaries) as on March 31, 2013:
1. Datamatics Global Services, Inc. (US).
2. Datamatics Global Services GmbH (Germany).
3. Datamatics Technologies UK Limited (UK).
4. Datamatics Infotech Limited (UK).
5. Datamatics Global Services Pty Limited (Australia).
6. Datamatics Global Technologies GmbH (Germany).
7. Datamatics Global Services GmbH d.o.o. in Bosnia
8. Datamatics Global Technologies Limited (Mauritius).
9. Datamatics Global Holding Corporation (BVI).
10. Datamatics Global Technologies AG (Switzerland).
11. CIGNEX Datamatics Corporation (BVI).
12. CIGNEX Datamatics, Inc. (US).
13. CIGNEX Datamatics Pte. Limited (Singapore).
Excerpts from AR 2012-13
Our acquisition of Cignex, two years ago was in response to the Open Source opportunity. Cignex is in âOpen Sourceâ. Cignex revenue grew from Rs 99 crores to Rs 193 crores in the 2 years after our acquisition Your company is relying upon both organic and inorganic growth. We are constantly looking for M&A targets in our business, with financial prudence. I am confident that our growth will exceed 30% in FY 2013-14 thanks to organic growth, M&As and the weakening rupee.
Promoted by founder Director of TCS â Lalit Kanodia
Surviving from 25 years in the industry
Company is in reviving phase after a few years of challenges.
High shareholding by promoters â 72.75%
Clean balance sheet â 100cr of cash and cash equivalents (excluding 40 Cr debt) on MCP of 320 cr.
Continuously paying dividend with 2% yield and good payout ratio of 25%.
Last 5 years has been challenging and didnât show the growth
61% of revenue from USA.
Growth is majorly from CIGNEX
Of late there is a re-rating in IT/ITES sector due to rupee depreciation, increasing opportunities due to US recovery and positive outlook for next 2-3 years. This has been extended to even small cap companies like R-systems, etc. Datamatics is one company which is in the same league and trading at forward PE of 6. This seems to be a good Opportunistic bet at the CMP of around 50. Any improvement in fundamentals and consistent growth may re-rate the company to 7-8 PE help to provide good return in the medium term of 1-2 years.
Request senior valuepickrs opinion.
Discl: No positions.