NINtec Systems Limited
Introduction
NINtec Systems Limited, headquartered in Ahmedabad, India. With a market cap of ₹925 Cr., this microcap company is poised for substantial growth, focusing on advanced technologies such as artificial intelligence (AI), machine learning (ML), blockchain and cybersecurity.
Company Overview
Founded: 2015
Listing: Main boards of BSE and NSE (since February 2023)
Global Presence: Headquarters in Ahmedabad, India and a subsidiary in the Netherlands
Customer Base: Serving Fortune 500 companies and SMEs across 18 industry verticals, including automotive, gaming, healthcare and fintech
Revenue Source: 95% from overseas customers
Services Offered:
- Business Analytics
- Cloud Services
- Application Engineering
- Testing Services
- Application Development & Maintenance
- Off/On-shore Software Product Development
- Legacy System Development & Software Migration
- Search Engine Optimization
- Multimedia design & development
- Web designing
User Industries:
- Automotive
- Print Media & Publishing
- BFSI
- Transportation & Logistics
Area of Expertise:
- .Net Development
- Game Development
- PHP Development
- ERP
- Wireless, Mobile, WAP Development
International Presence: Serving customers across 30 countries in 5 continents, with a strong presence in European markets, mainly Benelux countries.
Financial Performance and Growth Prospects
Revenue and EBITDA Growth:
- Q4 revenue year-on-year growth of 177.9%, with a 190.5% increase in EBITDA for the same period.
- Full-year EBITDA grew by 172% year-on-year.
Margin Stability:
- Margins are expected to remain strong due to favorable exchange rates, productivity improvements, and reusable components and tools.
Order Book and Pipeline:
- Robust pipeline with 95% of revenue from overseas customers. The Netherlands subsidiary plays a key role in securing large deals.
Revenue Breakdown:
- FY22 revenue: 79% from Software Export Income, 18% from Domestic Sales, and 3% from Other Income.
Cybersecurity Initiatives:
- Setting up Security Operations Centers (SOCs) in India and the Netherlands for real-time monitoring and response to security incidents.
Expansion Plans:
- Focus on export markets, leveraging presence in the Nordics, Benelux, UK, and North America.
Key Highlights and Future Outlook
Focus on Cybersecurity:
- Investing in cybersecurity, establishing SOCs in India and the Netherlands to enhance service offerings.
Global Expansion:
- The Netherlands subsidiary enhances access to European markets, facilitating larger multi-year deals and higher billing rates.
Strong Financial Position:
- Clean balance sheet with significant cash reserves and a low debt-to-equity ratio of 0.07.
Commitment to Talent:
- Heavy investment in attracting and retaining top talent to stay competitive in AI, ML, and cybersecurity.
Promoter Overview:
- Niraj Gemawat, founder and CEO, with over 27 years of experience, leading the company’s growth and innovation.
Challenges and Risks
Market Dependencies:
- Heavy reliance on non-English speaking markets poses risks related to geopolitical and economic fluctuations.
Talent Acquisition and Retention:
- Constant need for acquiring and retaining skilled professionals in a competitive industry.
Cybersecurity Landscape:
- The evolving cybersecurity landscape requires continuous adaptation and investment in research and development.
Investment Perspective
NINtec Systems is a growth-oriented company with a solid track record of delivering exceptional shareholder returns. Its focus on high-value, complex engineering services, particularly in the growing cybersecurity space, presents substantial growth opportunities. While global market volatility remains a key risk, the company’s strong financial position and commitment to talent development provide a solid foundation for future success.
