Analysts say the bottomline will get a boost thanks to the company's thrust on internet and intranet applications. In tune with its thrust on the information superhighway, PSI Data System is learnt to be in talks with venture capital funds for the expansion of its UK-based subsidiary, Accelerex. The latter develops products based onAxCIMS for internet and intranet applications, a 100 per cent pure Java application development framework. Accelerex is estimated to be worth US $10 million. The thrust on internet as well as the acquisition of the financial software and services division of Pricewaterhouse India should see PSI Data Systems ending the year with a net profit in the region of Rs 9-10 crore as against Rs 4.57 crore in the last fiscal.

Apart from the launch of a series of Internet products and applications, PSI Data Systems is also looking at acquisitions to chart a growth curve. It has recently acquired Price Waterhouse's financial software division, which will help PSI Data Systems to broad-base its service offering which is currently restricted to the banking segment. The acquisition has positioned the company as a full-fledged financial service solution provider. The revenues accruing to PSI Data Systems on account of the acquisition is estimated at Rs 1 crore in fiscal 1999 (as a result of the direct transfer of bookorders from Price Waterhouse after adjusting for royalty of 20 per cent).

The revenues from the divsion, analysts say, will grow by 100 per cent per annum in the next two-three years and, more important, the revenues are sustainable because the maintainance part of the revenue is expected to be about 30-40 per cent of the respective revenues. Apart from the revenue, the transfer of personnel as well as existing clients (which comprise MNC and private banks) will benefit PSI Data Systems substantially. Besides, the domain expertise can be leveraged with local clients like PSU banks and non-banking finance companies in India.

However, one factor which is bound to weigh heavily in the minds of punters is PSI Data Systems' exceptionally high expenditure. This can be attributed to the fact that PSI Data Systems markets its parent's (Group Bull) entire range of personnel transaction systems including ATMs, cash dispensers, point of sale terminals and smart-card based solutions for E-commerce in India. Also onthe flip side is that fact that PSI Data Systems often acts as an offshore development centre for its US parent -- that would explain the low margins compared with the industry average. On the other hand, the fact that Group Bull (in which companies like Motorola, IBM, NEC, France Telecom have a stake) is backing PSI Data Systems may be the reason why it commands such a high discounting on the bourses.

On BSE, the stock is currently range-bound at Rs 450-490. The scrip should move up in anticipation of the first-half results. On an equity of Rs 7.55 crore (face value Rs 2), the annualised earning per share in the first-half should work out to Rs 2.4, which discounts the current market price of Rs 460 by a price earning multiple of 192.