Tricom India Ltd - 105.00 Rs

From a modest beginning in 2000, Tricom India Ltd (TIL) is today, a well known non-voice IT enabled BPO services and IT enabled products company in document management space. It specializes in services like indexing, litigation coding, electronic data discovery, mortgage documentations, title plant maintenance and e-publishing. Tricom Information and Technology, a division of TIL offers total solution for electronic management of business documents, remittance processing, health claim processing, payroll management etc. It has been serving prestigious set of clients in the government and public enterprises in financial and banking, IT & software, legal, title plant, insurance, pharmaceuticals & logistics. With its presence in India and USA, TIL has more than 100 clients spanning across USA, UK, Ireland, Canada & Australia. Apart from having ISO 9001 and BS 7799 certification, TIL also boast of achieving the ISO 27001 accreditation, which is only awarded to companies who can prove highest levels of competency in information security management.

On the infrastructure front, TIL has state-of-the-art facilities measuring 29,000 sq ft. and 20,000 sq ft. across two locations in Mumbai (Vile Parle & Andheri), with an occupied capacity of 600-seats and 500-seats per shift. From January’07, it began operations in Nashik by leasing 10,000 sq ft area having world class facilities and recruiting 400 freshers. To expand and consolidate its operations, it has acquired another 10,000 sq ft area adjacent to its Nasik facility in May 2007. This facility with approx 250 employees is expected to start operations in next few weeks. Further for future growth, company is contemplating to acquire another 10,000 sq ft area and take the employee strength to 900 seatings with 30,000 sq ft of operational area in Nashik alone. Besides, Tricom Data Management Inc, its 100% subsidiary in USA has increased its hold in the U.S markets by adding 3 new offices over the existing 4 offices, thereby augmenting its presence to 7 cities in the USA. Earlier, it also signed an MOU with one company for Title Insurance for creating back plant for 25 countries in one of the States in USA. Offlate, TIL has ventured into e-publishing business under which it converts 26 conventional Newspapers and magazines to electronic form on a daily basis.

To summarize, TIL’s strategy is to first create infrastructure as per requirements of services which include domain knowledge, latest hardware, required application, secured network, etc. and then take up any assignment. Hence, it has managed to deliver 100% of its commitment and is growing at a scorching pace. For the latest March’07 quarter its topline more than doubled to 7.40 cr whereas its bottomline almost tripled to 3.25 cr. For the full year it recorded total revenue of Rs 30 cr and PAT of Rs 14.40 on standalone basis i.e. EPS of Rs 12 on equity of Rs 11.60 cr. Considering the booming BPO industry, TIL may report total revenue of 40 cr and profit of 15.75 cr i.e. EPS of 14 Rs on current equity. Company has a good dividend track report and gave 1:1 bonus last year. However the recent rupee appreciation is a cause of concern as it gets most of its revenue in US$ terms. Secondly, the low promoter holding of only 12% doesn’t give a comfort feeling. Therefore investors are advised to buy this scrip at sharp declines as scrip has the potential to give 50% return in 12~15 months.