Buy Helios and Matheson; target Rs 105: Sunidhi Securities

Sunidhi Securities' report on Helios and Matheson Information Technology (HMIT)

"Helios and Matheson Information Technology, during Q4FY13, consolidated net profit surged 58.1 percent to Rs 14.7 crore on 51.3 percent higher revenue of Rs 190.7 crore. OPM and NPM stood at 21.9 percent and 7.7 percent against 21.8 percent and 7.4 percent respectively in Q4FY12. Consolidated EPS for Q4FY13 stands at Rs 5.6. During FY13, consolidated net profit advanced 73.3 percent to Rs 49.9 crore on 44.8 percent increased revenue of Rs 651.2 crore.  OPM and NPM stood at 22.9 percent and 7.7 percent against 22.2 percent and 6.4 percent respectively in FY12. Consolidated EPS for FY13 stood at Rs 18.9 Vs Rs 12.1 in FY12." "HMIT has 24 clients, each of whom gives more than a million dollar revenue year-on-year. The top 10 clients give close to 50 percent of its revenue and five clients contribute above 5 million dollar in terms of revenue and in Q2FY13, it has added three more clients recently. They are all Fortune 500 organizations and with whom it has had long-standing relationship." "HMIT has recently signed a multi-year contract with one of its long-standing clients in the automotive sector; they are in fact manufacturers of an iconic brand of automobiles. HMIT is looking to sustain the kind of a growth momentum - having built a very robust organic growth engine. The total active clients are 74." "HMITL's increasing focus on BFSI, Healthcare and Technology verticals, strong USA and European presence, deep client relationships, sustained infrastructure, sales/marketing investments, a world-class knowledge-network set up give strong visibility to revenue & profitability going forward. At the current market price of Rs 88, the share is trading at a P/E of 3.7x on FY14E and 3.0x on FY15E. We maintain BUY with an increased target price of Rs 105 in the medium term," says Sunidhi Securities research report. Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More