R System International - Strong Fundamentals, Growth Stock

R Systems International incorporated in 1993 as a consulting firm in the United States. Started its India operations in 1997, in Noida, and started offshore software development services.

The Company had received strategic investments by Intel Capital and GE Capital in 2001 and 2002, and with a backdrop of success response obtained from ISVs (An independent software vendor is a company specializing in making or selling software, designed for mass or niche markets), R Systems had undergone a massive transformation by the year 2006.

Remarkable acquisitions include: Pune based Indus Software, and Singapore based ECnet. To further strengthen the Telecom Vertical, R Systems acquired UK based Computaris.

R Systems rapidly growing customer list includes a variety of Fortune 1000, government and mid-sized organizations across a wide range of industry verticals including Banking and Finance, High Technology, Independent Software Vendors, Telecom and Digital Media, Government, HealthCare, Manufacturing and Logistic Industries The company also continued its focus on quality and got the certification, SEI CMMi Level 5 v 1.2. R Systems maintains 13 development and service centres and serve customers in the US, Europe, South America, the Far East, the Middle East and Africa.

Services Provided :


* Application Services

* Testing Services

* BPO & KPO Services

* Packaged Services

A highly diversified product portfolio across various business domains and a diversified Geographical Presence:

* India

o Noida

o Pune

o Chennai

* Singapore

* United States of America

o El Dorado Hills

o Salt Lake City

o Atlanta

* Europe

o Enschede, Netherlands

o Metz, France

o Bucharest, Romania

o Warsaw, Poland

o London, United Kingdom

o Moldova

Past performance: (All Figures in Rs. Cr.)

Period Dec '10 (12 months) Dec '11 (12 months) Dec '12 (12 months) Dec '13 (12 months) Trailing 12 months
sales 290.5 409.5 465 596.05 646.5
operating profit 22.66 33.09 34.61 78.03 103.09
OPM (%) 7.8 8.08 7.44 13.09 15.92
other income 5.41 4.65 5 4.71 4.13
EBIDTA 28.07 37.74 39.61 82.74 107.22
PBT 14.04 23.81 28.85 71.83 95.43
PAT 16.78 16.51 18.36 52.7 68.11
EPS 1.37 1.35 1.47 4.19 5.38
Dividend Payout (%) 17.64 26.83 159.86 49.32 -

Operating margins are improving

RoCE is >30%

PAT growth = 30%

The company is Debt Free

Ahighly qualified management.

CMP: Rs. 49/50

P.E.: 9.10

Net profit grew by 75.53% at Rs. 85.57 million in current June quarter compared to Rs. 48.75 million in the corresponding quarter of the previous year

Total Consolidated Cash and bank balance as on June30, 2014 was Rs. 99.51 Cr

One of the leading providers of cloud-basedproducts for health insurers and state healthagencies based in USA has engaged R Systems forvarious cloud based J2EE initiatives using springand Hibernate technologies.


Slowdown in west (US and UK)

I do not have much direct information, but looks very interesting.

Views Invited.

Link to an already existing thread for more details


Results on 29th October2014…

Board to consider interim dividend. The company is giving out so much dividend

Although I liked the idea, I am concerned about significant ownership by promoters and one individual investor.The stock does not have any involvement from institutional shareholders which leads to a significant risk for retail investors of getting squeezed.

Does anyone has any thoughts on Bhavook Tripathi and how his prior involvement with companies turned out?

hiBravo Alpha,


Above are afew links on Bhavook Tripathi


Sri Krishna,

Thank you for sharing the links!

These articles make it sound like he just hold a passive stake and does not go activist on companies. I am still not sure why other institutional investors do not have a stake in this stock.

I will read a bit more about the company to figure out the story.

hiBravo Alpha,

http://www.outlookbusiness.com/article_v3.aspx?artid=282963 Link: http://www.outlookbusiness.com/article_v3.aspx?artid=282963

http://rakesh-jhunjhunwala.in/how-bhavook-tripathi-made-money-from-stocks/ afew](http://rakesh-jhunjhunwala.in/how-bhavook-tripathi-made-money-from-stocks/)

Wow, results for third quarter just out and third interim dividend of Rs 0.9.

Cash and cash equivalents of 100+ Cr

A decent third quarter results. The Company is selling its BPO business and also looking for divestment of its Pune based subsidiary.

The play gets interesting. Is the management trying to induce takeover barriers via sale of assets?

Views invited

Promoters GMU Infosoft have been continuously buying from open market.

Board to consider buyback.


Great news

R Systems International Ltd has informed BSE that the Board of Directors of the Company at its meeting held on December 20, 2014, inter alia, has approved the following:

1). Resignation of Mr. Vikash Kumar Tiwari as the Company Secretary and Compliance Officer of the Company effective December 20, 2014.

2). Appointment of Mr. Ashish Thakur as the Company Secretary and Compliance Officer of the Company effective December 20, 2014.

3). Proposal for Buy-back of the equity shares of the Company under first proviso to clause (b) of sub-section (2) of Section 68 of the Companies Act, 2013 with inter alia the following terms:

a) The total consideration amount for Buy-back shall not exceed Rs. 600 lakhs.

b) The total number of shares for Buy-back shall not exceed 9,500,000 equity shares and

c) The Buy-back price per equity share shall not exceed Rs. 100 per equity share

4). Payment of fourth interim (special) dividend for the year 2014 at the rate of Rs. 2.55 (Rupee Two and Fifty Five Paise only) per equity share of Re. 1/- each. Fourth Interim (special) Dividend will be paid on January 12, 2015.


I don’t understand the logic behind this buyback. If you look at market cap and valuations at CMP, I think it’s quite overvalued. Apart from this, 600 lakhs is not a big amount and why total shares to exceed figure is so high if you look at CMP? Could you throw some light on mgmt rationale for this buy back?

Hi Aksh,

I tried contacting management and also my friend who works at rsys but haven’t received any reply yet.

From my personal opinion given eps of 5.4 and buy back execution below CMP 100, Company may be executing buyback in P/E range of 16 to 19. Given the cash company has with no debt this doesn’t seems overvalued to me. Neither does it look cheap.

600 lakh may not be huge amount but its around 0.6% of market cap. These seems to be baby steps in right direction.

I am trying to get information from management and friend working there. Will post as soon I get any reply.

Hi Sunil & Aksh

IMHO management is taking these steps toavoid hostile takeover. Buyback would increase EPS though only marginally. Management is paying hefty dividend to distribute cash among its shareholders. These are steps to avoid hostile takeover because these steps lead to increase in the valuation of the company.


Management did not replied back however got some information from a friend in Pune who is working as Team Lead.

He said that RSystems had sold one of their unit in Europe. Not exactly sure about what is the exact amount collected but it is in excess of 6 crores rupees.

So with available cash it would be better to distribute dividends and do buyback to improve ratios.

Some information apart from above news which he shared.

He is working on financial project for big US client. Most of the employees in his office are completely occupied with loads of work and very very few are on bench, which is rare in services based IT companies. This seems to be a good sign.

1 Like

Anyone still invested in this or tracking this? The results has been poor but promoters and bhavook triparthi still hold a lot of shares

There are 3 threads on this stock. This one needs to be closed. One needs to be deleted completely as no posts there. Keep one.