Quintegra Solutions Ltd - Rs 78.00
Established in 1994, Quintegra Solutions Limited (QSL) is a global Information Technology services and consulting company, delivering measurable business results for clients through innovative, customized solutions. It delivers a full range of application development, testing, enterprise solutions, business process consulting, systems integration and staffing services as well as pre-defined solution frameworks. Leveraging its proven global delivery model, QSL provides a full range of custom software development solutions, focused software products as well as consultancy services in IT on various platforms and technologies. Its strategy is to focus on the high-growth, high-value segments of the IT industry. Hence its broad capabilities include application management, product engineering, enterprise solutions such as SAP, testing & validation, technology consulting, professional services and proprietary product suites. Presently, company focuses on six main business verticals including BFSI, Heatlhcare, Education & Training, Engineering Services, Logistic and Telecom. Unlike other Companies, QSL solutions have invested in creating products in its chosen verticals. This underlines its business knowledge of those verticals and allows it to provide value added services in those business domains.
QSL has more than dozen offices spread across USA, UK, India, Germany & Africa with five world class offshore development centers in India, Singapore and Malaysia. Company’s strongest advantage is its excellent pool of skilled resources, recruited from the finest clan of professionals in the industry. It enjoys long-term business relationships with clients across diverse sectors including some of the best-known global corporations like Walmart, E-bay, E-trade, Citigroup, Capgemini, Hitachi, Sun Microsystem, IBM, LG CNC, TIBCO etc. Being a SEI CMM 4 level assessed company, it believes that operations cannot be separated from technology and therefore it provides a wholistic service to its clients using its Operations-as-a-Service (Oaas) methodology which combines shared KPO services with its products run in a Software-as-a-Service (SaaS) model. This OaaS-SaaS methodology is unique in the industry as it provides operational benefits to its clients by focusing on operations and technology simultaneously. Moreover recently, company has ventured into Knowledge Process Outsourcing Services by setting up additional 70,000 sq ft of IT space in Chennai. It plans to focus its KPO services on the telecommunication, healthcare and BSFI industries to begin with.
Importantly in Oct 2007, as its strategy to grow inorganically QSL acquired M/s. PA Corporation, Virginia, USA (PAC) for a consideration of Rs 148 crores (USD 37 Million) in an all-cash deal. QSL will pay 0 cr (USD 20 Million) upfront and the rest over a period of 3 years, depending on PAC meeting certain performance milestones. PAC specializes in high end IT consulting and leadership in middle-space IT services such as enterprise application services, date architecture & data validation, audit compliance documentation, business process management, integration architecture & deployment and testing & configuration management. With this acquisition QSL global headcount now stands to over 1,000 professionals.
Financially, on a consolidated basis company has posted satisfactory nos for the March’08 quarter but for entire FY08 its topline as well as bottomline has increased by 5x times to Rs 390 cr and Rs 35 cr respectively. Hence it has registered an EPS of Rs 13 on current equity of Rs 26.80 cr. To fund its inorganic growth company has made a preferential allotment of approx 26 lac warrants to be converted @ Rs 135 per share. Although there is a risk of rupee appreciating again, still company is expected to earn a PAT of Rs 42 cr on revenue of around Rs 600 cr i.e. EPS of Rs 14 on diluted equity of Rs 29.50 cr. At a modest discounting by 12x times scrip can shoot upto Rs 175 (125% appreciation) in 12~15 month. It’s a screaming buy at current market cap of merely Rs 200 odd cr.
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