Paradyne Infotech - Rs.68.00

Incorporated in 1997, Paradyne Infotech Limited (PIL) is Mumbai-based IT Company focused on three main strategic business areas viz. - software services, managed services & system integration. It also offers BPO services, which largely comprise of database management services for existing clients. PIL’s services and enterprise solutions are in the areas of e-Commerce, Business Intelligence, Business Process Management and Customer Relationship Management that are provided to specific industries like Banking, Financial Services, Insurance, Education & Research, e-Governance, Manufacturing & Retail, Healthcare and Telecom. Its managed services include facilities management, network management, remote management, disaster recovery management, maintenance services, application management and database management. PIL has a good resource base of technical professionals for system integrations like database integration, application integration, server integration, desktop and operating system (OS) integration, network integration, security integration and storage integration.

PIL has developed two key software products ‘HrWorQ’ & ‘FinWorQs’, which got a good response from the market and are doing well. HrWorQ is a complete integrated solution, which provides a new generation IT architecture for the Human Resource management within an organization. FinWorQs is a core banking technology that is completely centralized, customer-centric, fully integrated solution addressing the needs of Foreign Banks, Nationalized Banks and Co-operative Banks. It has an impressive clientele, which include JM Morgan Stanley, IDBI Bank, Corporation Bank, SBI, Indian Navy, HUDCO, Reliance Infocomm, Idea Cellular, Hughes Telecom, ONGC, IPCL, Globus Stores, KPIT Cummins etc. Notably, PIL has various strategic and partnership alliances with international biggies like Oracle, Sun Microsystems, Veritas, IBM, Acer, CISCO, APC, HP and Microsoft. It has recently won the coveted Deloitte Technology award for being among the 500 fastest growing technology companies across Asia Pacific region. The company also has a wholly owned subsidiary called Sundune Corporation in USA, which looks after the implementation and support functions as well as exclusively marketing its products in USA.

In Oct 2005, it came out with IPO to raise around Rs.14 cr. for funding its modernization & expansion plan including upgradation of products, infrastructure, R&D lab and a software development centre apart from setting up data and call centres. For future growth, PIL is aggressively shifting its focus from system integration to software services, which would improve its profit margins going forward. On a conservative basis, we expect it to report sales of Rs.125 cr. and NP of Rs.10 cr. For FY07, this works out to an EPS of Rs.9 on its equity of Rs.10.90 cr. Hence with reasonable discounting by 12 times, it can cross Rs.110 (50% appreciation) in 9~12 months. Buying recommended on declines.