Saturday, February 24, 2007

Buy 3i Infotech for good returns

3i Infotech
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs400
Current market price: Rs260

3i Infotech reported an impressive performance during the quarter ended December 2006. The consolidated total revenues grew at a robust rate of 45.1% to Rs424 crore. The operating profit margin (OPM) expanded by 390 basis points to 20.5%. Consequently, the reported consolidated earnings almost doubled to Rs57.4 crore. The adjusted earnings (including the dividend on preference shares) grew by 128% to Rs48.8 crore.

In terms of its overall broad business strategy also, the company took some significant steps to enhance its product portfolio and geographical reach. The three acquisitions made during the second half of FY2007 (Innovative Business Solutions Inc, FormulaWare Inc and SDG Software Technologies) not only enhanced the product portfolio and the range of service offerings but also provided new customers in untapped geographies. In terms of organic initiatives the company strengthened its sales and marketing infrastructure by setting up offices in Thailand and Kazakhstan.

Posted by Ayush Jain at Saturday, February 24, 2007

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