New Delhi, Aug 10: Thanks to a 658 per cent jump in net profit for the quarter-ended June 30, 1999, Aftek Infosys Ltd is having a dream run on the bourses. In 26 trading sessions, the stock has gained over 111 per cent to Rs 167.55 and with the future growth prospects bright the uptrend is likely to continue in coming months. A month ago, the stock was changing hands at Rs 79. On Monday, the stock exhausted the daily limit of eight per cent. There were only buyers at the Aftek Infosys counter.The sudden buying interest in the counter is attributed to the composition of the last quarter net profit. Of the Rs 3.79 crore net profit earned in the three month period, around Rs 2.74 crore has come from sale of software product. Considering the company has entered the software business only twelve month ago, this is quite an achievement. In 1998, the company decided to move out of the low margin hardware business (trading in computers and related peripherals) and decided to concentrate on software development in the domestic market and for exports.
The company's paid-up capital in fiscal 1999 rose by Rs 1.5 crore to Rs 5.74 crore due to the preferential allotment to NH Securities Limited at a premium of Rs 26.50. The funds raised were to be used to restructure the business operations and give a greater thrust to software developments and software-driven products.
According to market sources, the company has orders worth $ 4 million from US-based firms to be executed in the coming 12 months. The orders include around $ 2.4 million for e-commerce, a business where the company sees its future. Aftek also has BMC, Blue Dart, and Hinduja as its customers for web designing.
Currently, the company also has orders for projects on system level which has high margins. For the 12-month period ended June 30, 1999, the company's net profit has increased to Rs 6.1 crore, 246 per cent higher than previous year's net profit of Rs 1.76 crore. On an equity of Rs 5.74 crore, the earnings per share works out to be Rs 10.62. Thus, the stock is still trading at low PE multiple of 15 times, leaving room for further appreciation. The next year will see its EPS zoom up substantially as benefits of the focus on software development and major orders for personal data assistant (PDAs) are expected to be fully realised.
Aftek has a software development centre at Pune which employs around 30 software professionals. It has developed software-driven products like PDA, smart card instruments, bar code readers and multi lingual terminals. PDA machines are meant for organisations like para-banking firms that require remote data collection or remote computing. PDAs have made it possible for electric and gas companies to effectively, accurately and quickly collect data from remote consumer sites.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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