Excellent call on OFSS. What have been the recent triggers behind improved financial performance and arre the se nos sustainable ?
OFSS was like ITC, 2 years back.
There were lot of pessimistic views from Analysts and that was the time to invest. When Dividend Yield of any stock goes above 5%-6% which was the case with OFSS 2 years back, Downside risk is generally low and upside depends on its earnings performance.
OFSS now looks slightly overvalued as some of the EPS growth in Licensing its cloud based products may sustain or may not sustain.
A usual, I may be wrong in my analysis and understanding.
Strong numbers from OFSS
Q4 Revenue up 12% YoY and Profits up 17% up year on year.
Dividend Rs 240
Now this is not blockbuster result like last Q but this is sill best in industry and stock is still reasonably priced considering sticky, geo-diversified, high margin, B2B, only listed blue blooded software products company.
Some analyst may have built unreasonable expectation based on last Q cloud bookings and we may see some knee jerk reaction.
Another point to note is that unlike IT services there is no disruption to their business from AI. Infact AI implementation within their product for business processes will lead to premiumization or add-on modules leading to higher license pricing.
Dolat raises target price to 7900
Stock rallied due to blockbuster Q3 results.
In today’s world some insider trade can not be ruled out.
Volatility is due people inability to understand company, transition to SaaS model and its unpredictability, product new orders which are capex in nature thus don’t come at regular intervals.
I remember a very famous investor who was mentioning on TV that he bought it for IoT play.
This is not QoQ stock. AT best analyzed from Yearly perspective and how core banking is moving.
Has OFSS ever disclosed who their largest client is, accounting for ~52% of their revenues? I have gone through the thread but couldn’t find it. Was just wondering if that is a major risk, if at all?
It is likely Citibank? It was a Citi subsidiary in original avatar
Superb results once again. Power of SaaS product kicking in.
Revenue up 19% and profits up 23%. (Product revenue up 21% and services flat)
Operating income up 36%.
70.69 is quarter EPS.
Dolat raises target price to Rs 10,500
Has been trying to analyze the company after recent runup as it has become > 10% of my PF.
Looks like this still has a long-runway ahead. Reports predict 9.3-18.4% growth in core banking software till 2030.
Also, OFSS has only 6.5-8% market share based on above reports.
Another +ve point is that OFSS has insignificant market share in US which is 50% of global market. OFSS is likely to gain market share supported by its parent.
Given above scenario, OFSS can easily clock 10-12% of revenue and 15% of profit growth for next decade.
Oracle Financial Services reports strong numbers yet again
Net Profit Up 38.4% At ₹577.7 Cr Vs ₹417.4 Cr (YoY)
Revenue Up 15.9% At ₹1,673.9 Cr Vs ₹1,444.5 Cr (YoY)
EBITDA Up 34.5% At ₹750.6 Cr Vs ₹558.1 Cr (YoY)
Margin At 44.8% Vs 38.6% (YoY)
I am not sure which all OFSS project are working.
Based on my information many of their project with big clients have been scraped.
I wonder how OFSS getting all these results.
What is your source of information and which are those clients?
slightly disappointing Dec 24 quarterly results https://www.bseindia.com/xml-data/corpfiling/AttachLive/fc836573-d4f9-4548-93e5-c6eeeba3824d.pdf