Intrasoft technology

hi guys just now i recd research report from value2wealth blogs.i personally feels very intresting story .u pl.read report and share your view

As per new regulations of SEBI, it seems that only SEBI qualified research analyst can express buy , sell , hold , accumulate etc. recommendation about a stock through any public media. SEBI has given six months time(May2015) to comply with it for existing research analyst .I am not SEBI qualified research analyst but I am aspire to become research analyst in next 3-5 years .So , purpose of this blog learn and put analysis of company with whatever I know and get input from SEBI qualified research analysts . I am sure this learning method will help me to become SEBI qualified research analyst one day.I think this rule is quite appropriate since how can person like me who is still learning give any opinion of buy , sell particular stock.

Today, I would like to get input on “Intrasoft Technologies Ltd” . Since you are experience research analyst you will say what is special here . They have www.123greetings.com which offer greeting services free of cost, generate revenue from add services and as per current market cap trading fairly .

My interest in this counter is not generated because of www.123greetings.com but something else . Look at the following screen shot and let me know if a e-commerce company in USA growing with these figures wouldn’t attract your interest . How much will you pay for this company ?

Source :http://www.inc.com/profile/123stores

This is nothing but http://123stores.com/ e-commerce division of 123greetings.com

USA which is wholly own subsidiary of “Intrasoft Technologies Ltd” .

Please look into following links for highlight of last quarter . We cannot compare data directly with Snapdeal and Flipkart . It is growing fast with small base , same time present tremendous opportunity for me to participate in growth of e-commerce since very few e-commerce companies are listed like Info Edge , Just Dial etc. Those are available at high valuations and already discovered by market .

http://www.itlindia.com/investor-relations/press-releases/Intrasoft-Technologies-Limited-Reports-128-Growth-In-Revenues-For-Q2-FY-2015

During the quarter they entered the US Internet Retailer Top 500 list at 499 from last years more than 650.

I still need to analysis business model but as per my initial analysis it generate revenue by two ways .

  1. Partnership with other top USA marketplaces (ashop in a shopa format) like Amazon, Ebay .We can describe in another words as marketplaces inside marketplaces .If it get commission from register vendors and not hold actual inventory . I do see quite low inventory in balance sheet .

2). Direct sale from http://123stores.com/

. I believe this is small portion at the moment since as per Alexa only around 3000 unique visitor visit daily this site but that count is also growing fast .

http://123stores.com.alexaview.com/

Open question to management .

  1. What is mix of above mention channels ?
  2. You mentioned “Our growth in the E-commerce business can be directly attributable to the strength of our proprietary enterprise software” . What are these strengths ?

I do also see good growth potential in http://www.123invitations.com/

but they need to make UI impressive and add few more value added features.

123Stores, Inc, reported record sales over the long holiday weekend from Thanksgiving Day through Cyber Monday of over $2 million, a 243% percent increase over last year. The Company sold one item every 7 seconds on Cyber Monday.

Please refer http://www.webwire.com/ViewPressRel.asp?aId=193500#.VIhzAdKUf3Q

Shareholdingpattern:

Kotak Mahindra Investments Ltd was holding around 6% share but recently they have release around 3% share . Not sure who has pledge those share since no promoter shareholding was pledge may be some HUF . As you can see retail investor holding is not even 10% in this stock . All the shares are in strong hands .

“Intel Capital (Mauritius) Limited” also hold around 12% of “Intrasoft Technologies Ltd” which gives confidence but I believe it is may be just strategic investment by Intel .

Corporate Governance :

I am still learning to scan corporate Governance level . I have not found any red flag as such . Just need to dig more on Kotak Mahindra Investments Ltd’s release of shares . I saw around 465 crores of cash in balance sheet of 2009-10 but next year was reduce to just 3 crores . I was at my wits end to figure out where they have spent so much money or spinned off but when I check annual report of 2010 and 2011 then I realized it was IPO money company had received(before financial year ending) due to over subscription and returned it next month(year) . So no issues on this front .

“Intrasoft Technologies Ltd” also put audited annual reports of it subsidiaries on their website that is good move .http://www.itlindia.com/investors/financials.html

Future Plan :

They are going start using platform of Alibaba similar to Amazon .“Intrasoft Technologies Ltd” is also planning to launch same platform in Canada which will again help top line to grow and obliviously they will target India as well . If that happen then top line growth will again get some boost . Management has also indicated that “We continue to focus on growing the business and re-invest the cash surplusas back into the business. As a result, in the short term, the bottom line may not correspond to the topline growth but we are confident that once economies have reached, it will yield even greater financial results.” They can easily leverage huge database of customer base of www.123greetings.com

to promote new e-commerce website.

Conclusion :

It is not Flipkart or snapdeal , business model may not be same but for me it is Flikart or Snapdeal of poor man. If it achieves even 3-4% of flipkart in next 4-5 years then that will sufficient to create some wealth.I am sure If I dig more then I will get few more positive and negative but at current market price of 52 market cap of company is only around 75 crores , growing fast, it holds cash around 8.33 crores and dividend yield is around 2% . I believe at this price I am not going to loss much but if not all the things but most things click for this company then sky is the limit who knows. I would like to get input from qualified research analyst on my analysis made for myself .

Good Find Uday. I think if they decide to enter India, then it can be a pretty good move. Will read more and contribute.

i posted this article when price of intrasoft (isft) trading at 51 now price is 62. still its worth buying .u compare valuation of flipkart with isft. flipkart sales is approx. 12000 cr.while its valuation as per last funding is 60000 cr…that means sales to mkt cap is five times.if we consider this isft sales is 250 cr then if we give only two times sales to mkt cap then valuation comes to 500 cr.while isft mkt cap is only 75 cr.so isft will touch minimum 400 to 500 rs.and if they started operation in india then isft will become stock of 2015 .so enjoy ride.

hi Uday,

good find. i have invested too after reading your article and going through the AR.

A lot depends on the execution of the mgmt and abiltiy to grow Bottomline.

From the AR , the mgmt seems to be alright and I dont see any rosy predictions , self appreciation talks which is good. Mgmt has indicated now that they are investing in the infrastructure to meet the demand and profits will follow. What i liked most was the drop in debt levels as per Sept results even when the revenue has increased almost 100% yoy.

lets see.

intrasoft tech bumper result sales 122.63 cr up by 137 % against 52 cr. and pat 4.15 cr against 0.15 cr.just buy and hold this eretail mini flipkart company.they are now planning to start operation in canada and there after india.this type of growth only see in eretail company

As per latest announcement the company has been ranked 392 by U.S. Internet retailer Top 500

This is an improvement from the last year ranking of 499

It is a cautionary note … This company (Intrasoft) is a total avoid. The promoters have extremely poor track record on almost all parameters of running a business.

Don’t worry if it goes to Rs. 5000/- or Rs. 10000/- … Just don’t put your money here.

Do your own basic and fundamental due diligence and you would easily find out why I have commented these.

Check promoters background thoroughly (Arvind and Sharad Kajaria), talk to few people worked in the company, find out name of their CTO and his background from LinkedIn or elsewhere, talk to its competitors (if you think there is any), check their website, see if they accept credit card for payment, see review on the internet from certified buyers from a credible review platform, talk to their US office or find out details about US operation and then closely look into financials etc over few years …

Sorry if I sound didactic or preachy but I thought being a long time investor I can take this little liberty from all these enthusiastic folks writing in this thread :slight_smile:

In case anyone interested, can mail me through Valuepickr…

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I believe this might help answer some of your questions.

But at the current CMP, not sure if this would still be a buy. As things about them entering into india are not clear and hence how are they planning to scale up their operation.

Cheers

AR Link http://www.itlindia.com/docs/Annual_Report_2015-2016.pdf

Digging this old thread. Well was intrigued by this companies growth rate but well u nailed it . There is lack of any ethical practises by Intrasoft. Just visit glassdoor check companies ratings wow for a tech company this one performs really really badly. I think in any tech based company the human resource is at the helm . Look what happened with the infy fiasco recently. This is totally an avoid script for the time being. Well if u can get tons of better mid cap IT picks why would one go for this. On another note the amazon.com storefront of 123stores has just 444 products on offer. Doesnt seem to me a huge range of products which they offer. Customer ratings are also averaging 97% again not a sign to be the best of the lot in ecomm companies.

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dear @aveekmitra ji - kindly elaborate why you think this is a total avoid
I have read through the pointers raised by you however if you can provide some more details, it would help us understand more

Some facts on Intrasoft Technologies Limited

I just bumped into this thread. I completely endorse Aveek’s views.

Long time ago I (running a company in internet ad services) did business with them via one of the promoters. They talked big and we trusted them and offered our technology and services over a one page agreement, in good faith.

After enjoying the services for a month, payment did not come through…and I still recall the manner in which I was dismissed from their new Mumbai office when I talked payment with him. He basically asked me to go to hell without saying exactly so. I and my team had a very tough time, because we had back to back arrangements with the content publishers who gave up their banner space for us for a fee.

We ultimately had to write off 50% of our receivables. I decided never ever to do business with them. No one can win over time by fraudulent behaviour.

Cheers,

P.S: Never invested

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Some fact people would wanna take into account

  1. Ashok Bhandari has joined the board of directors of the company
  2. Company endeavouring to becoming negative working capital in coming few years.
  3. Have an adjusted roe of 30%
  4. Growth rate should come back to his historical rates.
  5. Net cash of 66crs
  6. More than 1600 vendors working with the company
  7. Ranks 223 in the top 500 retailers in US
  8. Even in the period of restructuring the company managed the growth rate of 30%.
  9. Improvement in margins.

The count of reviews have reduced in the last 3 months on Amazon - from 6K per month (from 12 month average) to 3K per month. Is this because of Amazon prioritizing Amazon fulfilled over marketplace sellers?
Also from a product visibility perspective when i search for the products sold by 123stores, the first few products are mostly the ones listed by Amazon fulfilled.

You can’t see it like that. Q2 and Q3 will have maximum reviews. So you cant not annualize this numbers.

Super thoughts Aveek.


@aveekmitra what a fantastic direction from your side. You almost predicted the future 6years ago.