Buy Cranes Software: Pioneer Intermediaries

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Buy Cranes Software: Pioneer Intermediaries

Broking house, Pioneer Intermediaries is bullish on Cranes Software International and has maintained buy rating on the stock.

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Cranes Software BSE | NSE 01/01/70 Are Mutual Funds betting on Cranes Software?

Broking house, Pioneer Intermediaries is bullish on Cranes Software International and has maintained buy rating on the stock with a price target of Rs 135.

Pioneer Intermediaries report on Cranes Software:

"Cranes Software International, (CSIL) reported a 46% YoY increase in net sales and 54% increase in net profit at Rs 696 million and Rs 211 million respectively in Q2FY07. Sequentially, net sales and net profit increased by 12% and 11% respectively."

"Exports in the quarter increased by 63% YoY and 8.4% QoQ to Rs 577 million. Domestic sales, while seeing a slight decrease of 4% YoY, witnessed a sharp upsurge on a sequential basis, growing by 35% to Rs 119 million. The overseas: domestic salesmix for the period improved to 83:17, from 74:26 in Q2FY06."

"Proprietary products continue to drive revenue growth showing a 53% YoY and 7% QoQ increase to Rs 563 million. Third party software revenues grew sequentially by 15% YoY to Rs 91 million."

"Continued momentum in sales of high margin propreitary products along with lower material costs and SG&A expenses (as a % of sales) led to margin expansion of 580 bps QoQ to 57%."

"During the quarter. CSIL completed the integration of its acquisitions i.e. InventX and  Capella. During the quarter, it also issued 1 million equity shares towards InventX acquisition."

"With five acquisitions undertaken over the past 18 months and CSIL's proven capability in enhancing acquired IP's, the company should be able to exceed our FY07 earnings estimates. Due to the high scalability potential from the acquired IP's i.e. SIGMA, SYSTAT and others due to constant upgradation of versions, there is high revenues visibility and safety of margins. However, we plan to revisit our estimates, once the impact of its newer acquisition as well as expansion of geographical reach becomes clearer. Hence, we maintain our BUY recommendation with a price target of Rs 135 on an investment perspective of six months."