Omega Interactive Technologies Ltd

Transcription

1 IT Software & Products November 05, 2012 CMP Rs. 2.4 BSE Code BSE ID OMEGAIN High/Low 1Y (Rs.) 4.6/ 2.4 Average Volume (3M) 609 Market Cap (Rs. Cr.) 1 Shareholding % Sep-12 Jun-12 Promoters DIIs # - - FIIs # Public & Others Stock Chart ( Relative to Sensex) Nov May Nov-12 OMEGAIN Sensex Stock Performance (%) 1M 6M 1Yr Omega Sensex Financials FY09 FY10 FY11 Revenue Y-o-Y -20.8% $ 14.0% EBITDA Y-o-Y 9.6% $ % Net Profit Y-o-Y EPS (Dil.) EBITDA Margin -30.8% 61.8% -1.1% Net Profit Margin P/E(x) Financial year ends at March 31. All figures in Rs. crore except for per share data # FIIs- Foreign Institutional Investors Company Overview. was incorporated in 1994 by a private Indian party and is mainly engaged in computer software. Mykindasite International Private Ltd was formerly known as Omega Portals Private Ltd. and changed its name to Mykindasite International Private Ltd. in July The company was incorporated in 1999 and is based in India. It operates as a subsidiary of. Moreover, Malvern Trading was converted into a subsidiary company of Omega Interactive Technologies with effect from September 10, Malvern Trading Company is engaged in the business of financial services and its main activities are investment banking and investment management services. The company provides expertise in the field of information technologies through various activities like writing, modifying, testing and supporting software to meet the needs of a particular customer; planning and designing computer systems that integrate computer hardware, software, and communication technologies; on-site management and operation of clients computer systems and/or data processing facilities; and other professional and technical computer-related advice and services. The company operates its business within the country. Company Fundamentals Top line witnessed moderate Y-o-Y growth in FY11 During FY11, the revenue of the company increased to Rs. 9.0 lakh under review against Rs. 8.0 lakh in the previous financial year. EBITDA witnessed a sharp fall of 102%, which was mainly attributed to increase in other expenses. Muted bottom-line performance During the year under review, the net profit of the company plunged to (-Rs lakh) in FY11 against Rs. (-34.3 lakh) in FY10. The taxes carried forward from the previous financial year affected the PAT in FY11. Moreover, on the macro front, rising inflation, falling growth and worsening investment climate adversely impacted consumer sentiments. The global economic environment was confronted with geo-political instability, Euro zone crisis, fluctuating currency rates etc. This badly affected the net margins of the company. The net profit margin witnessed a sharp fall of 601.9% in FY11. Key Strengths - Proven, experienced and qualified team management. - Embracing emerging technologies, adopting new business models are some successful growth strategies followed by the company. # DIIs- Domestic Institutional Investors $-Represents huge change due to base effect Initiative of the BSE Investors Protection Fund -1-

2 Company Business. was incorporated in 1994 by a private Indian party and is mainly engaged in computer software business. Mykindasite International Private Ltd. was formerly known as Omega Portals Private Ltd. and changed its name to Mykindasite International Private Ltd. in July The company was incorporated in 1999 and is based in India. It operates as a subsidiary of. Moreover, Malvern Trading was converted into a subsidiary company of Omega Interactive Technologies with effect from September 10, Malvern Trading Company is engaged in the business of financial services and its main activities include investment banking and investment management services. The company conducts business from its corporate head office located in Maharashtra. The company provides expertise in the field of information technology through different activities: writing, modifying, testing and supporting software to meet the needs of a particular customer; planning and designing computer systems that integrate computer hardware, software, and communication technologies; on-site management and operation of clients computer systems and/or data processing facilities; and other professional and technical computer-related advice and services. The company operates its business within the country. Year Milestones 1994 The company was incorporated as a private limited company in Maharashtra on March 22, The company has been authorized by SEBI as Category I Merchant Banker The company has also entered into a technical collaboration with Bernard Herold & Co. U.S.A The company was engaged in the business of financial services and the main activities were Investment Banking services and Investment Management Services till 1st of January The company entered into IT-enabled services, with a focus on medical transcription to cater, to the U.S. markets. The company has informed that Omega Portals Ltd, a subsidiary of the company, is in the process of negotiating with venture capital funds which have evinced an interest in taking up a stake in the equity of Omega Portals Ltd. Initiative of the BSE Investors Protection Fund -2-

3 Industry Overview India s IT industry can be divided into five main components software products, IT services, engineering and R&D services, ITeS (IT-enabled services) and hardware. Export revenues which primarily come from projectbased services, continue to drive growth. Multi-year annuity based outsourcing agreements are expected to increase going forward. However, the majority share of the project-based revenues is going to continue on the back of custom application development and application management. Cost leadership has been the competitive edge of the Indian software sector over the last few years. However, this seems to be threatened now by MNCs who are replicating the Indian outsourcing model and setting up bases in the country. Going forward, the advantage of low employee costs could go out and the sector might get commoditised. Increasing competition, pressure on billing rates and increasing commoditisation of lower-end application development and maintenance (ADM) services are among the key reasons forcing the Indian software industry to make a fast move up the software value chain. IT companies have to move up the value chain to provide higher value-added services as consulting, product development, R&D and end-to-end turnkey solutions. Therefore, companies have started shifting their focus towards high-end as well as value-added services to keep their competitive advantage intact. Now they are also looking at emerging business themes like analytics, mobility and cloud computing. The software services segment of the industry continues to grow by leaps and bounds. With the Government emphasizing on better technology-enabled delivery mechanisms for multitude of Government projects such as e-passport, Unique Identification Scheme, e-learning, virtual classrooms, tele-medicine, remote consultation, and mobile clinics, the domestic market looks equally more promising. * **Prospects: Within Software and services exports, IT services accounts for 58%, BPO nearly 23% and ER&D and Software products account for 19%. As a proportion of national GDP, the sector revenues have grown from 1.2% in FY98 to an estimated 7.5% in FY12. While the global macro-economic scenario remained uncertain, the industry exhibited resilience and adaptability in continually reinventing itself to retain its appeal to clients. Embracing emerging technologies, increased customer-centricity, deepening focus on new markets and adopting new business models are some successful growth strategies followed by the industry. (Source: (Software Analysis Report Dec 2011*, NASSCOM STRATEGIC REVIEW 2012**) Competitor Analysis We have compared. with its close peers in the IT Consulting & Software industry. Company Year End CMP* M Cap Revenue EBIT Margin Avance Technologies Ltd Mar % x Taksheel Solutions Ltd. Mar % x Omega Interactive Technologies Mar % Source: Company Financials Capitaline *Price as on Nov EPS P/E Initiative of the BSE Investors Protection Fund -3-

4 Summary Financials Particulars (Rs crore) FY09 FY10 FY11 Net Sales Other Op. Revenue Total Revenue Growth (%) % $ 13.97% Cost of Goods Sold Gross Profit Employee Costs Other Expenditure EBITDA Growth (%) 9.55% $ % Depreciation EBIT Profit Finance cost Other Income Exceptional Items PBT Growth (%) Income Tax Profit after Tax Extra Ordinary Items Net Profit Growth (%) Rep. Basic EPS Rep. Diluted EPS Equity Capital Face value Ratio Analysis FY09 FY10 FY11 Margins EBITDA Margin (%) -30.8% 61.8% -1.1% Net Profit Margin (%) Valuation P/E (x) P/BV (x) Profitability ROCE (%)* % -0.1% RONW (%) -0.1% -53.7% % Solvency Ratio Debt/ Equity Ratio (x) Interest Cover (x) *Bifurcation between Long Term and Short Term Debt are not available for FY08. Initiative of the BSE Investors Protection Fund -4-

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