Buy RS Software; target of Rs 236: Sunidhi Securities

Sunidhi Securities' report on RS Software (India)

"RS Software (India), during Q3FY14, net profit after minority share has gone up 57.6 percent to Rs 13.4 crore on 21 percent higher revenue of Rs 94 crore. OPM and NPM stood at 23.6 percent and 14.9 percent Vs 16.1 percent and 11.5 percent respectively in 9MFY13. Q3FY14 EPS stands at Rs 10.5. During 9MFY14, consolidated net profit after minority interest rose 30.4 percent to Rs 35.2 crore on 19.3 percent higher sales of Rs 288.7 crore. OPM and NPM stood at 22.0 percent and 12.2 percent Vs 18 percent and 11.2 percent respectively in 9MFY13. 9MFY14 consolidated EPS stands at Rs 27.5. An interim dividend of 10 percent has been declared against 25 percent paid in the previous quarter. A 35 percent was paid for FY13."

"During FY13 and 9MFY14, USA accounted for 87 percent of sales whereas ROW (rest of the world) 13 percent of revenues. Domestic revenue accounted for just 0.4 percent of total sales. RSSIL sees demand recovery in the U.S. which bodes well for its business given its exposure to the market. RSSIL continues to put significant thrust on innovations and in building competencies through the Payments Lab and School of Payments. RSSIL is confident that given the improving market conditions and the potential growth in the electronic payments industry, it will consistently tread a high growth trajectory."

"RS Software has built solutions for the introduction of new standards such as EMV and emerging payment areas like mobile and contactless payments, while enhancing the ability of its clients to manage their legacy systems. The domain focus makes RS Software a partner of choice for its customers and an employer of choice for its employees."

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