Scrip Watch

Megasoft Ltd

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Megasoft Ltd

Megasoft Ltd
IT Software Products

FV – Rs 10; 52wks H/L – 14/4; TTQ – 85000; CMP (May 24, 2016) – Rs 9.76;

Market Cap – Rs 43 Crs

Consolidated Financials and Valuations for 9MFY16 (Amt in Rs Crs unless specified)


Equity Capital

Net worth

Long Term
Debt*

Total
Sales
PAT
BV
(Rs)

TTM EPS (Rs)

TTM
P/E

Industry
P/E

P/BV

Promoter’s
Stake

Beta
44.27 164 43 (5.27) 37 (0.94) 20.44 3.79 7.24 1.51

*As of September 2015

Consolidated Financials and Valuations for 15 Months ended FY15 (Amt in Rs Crs unless specified)


Equity Capital

Net worth

Long Term
Debt

Total
Sales
PAT
BV
(Rs)

EPS (Rs)

P/E

P/BV
44.27 170 101 0.73 38 0.16 61 0.26

 

  • The company lost its biggest customer contract from Q3 of 2013, resulted in lower revenues and EBITDA in the FY15.
  • The share price has moved up by 45.67% in the last two months from Rs 6.7 (24/3/2016) to Rs 9.76 (24/5/2016). However, the stock has breached Lower Circuit three times in the last one week.
  • Company’s top five clients contribute to more than 50% of the revenues.

Recent Updates

  • Megasoft was awarded a patent in Near Field Communication (NFC) technology in July 2015. The invention relates to a smart integration of dual architecture contactless SIM into mobile devices and describes the method of efficiently performing various financial transactions. The patent was filed in February 2010 and was awarded by the US Patent and Trademark Office in July this year.

Near field communication (NFC) is a set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a Smartphone, to establish communication by bringing them within 4 cm (2 in) of each other ~ Wikipedia

  • In June 2015, the company was awarded patent pertaining to the method for performing authentication and service translation for Mobile Virtual Network Operators (MVNOs). The patented technology is at the core of the company’s XIUS Mobile Services Platform (MSP) and has been granted by the US Patent and Trademark Office.

mobile virtual network operator (MVNO), or mobile other licensed operator (MOLO), is a wireless communications services provider that does not own the wireless network infrastructure over which the MVNO provides services to its customers. An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, and then sets retail prices independently. An MVNO may use its own customer service, billing support systems, marketing, and sales personnel, or it could employ the services of a mobile virtual network enabler (MVNE) ~ Wikipedia

Bulk Deals

Date Client Transaction Quantity Traded Price (Rs)
06-Apr-2016 ASHISH DHAWAN SELL 633037 6.69
15-Jan-2016 ASHISH DHAWAN SELL 233913 10.21
12-Jan-2016 MISHRA RAKESH BUY 246206 13.09
12-Jan-2016 ASHISH DHAWAN SELL 508943 13.09
12-Jan-2016 MISHRA RAKESH SELL 82644 13.52
08-Jan-2016 ASHISH DHAWAN SELL 469682 13.18
07-Jan-2016 ASHISH DHAWAN SELL 345074 13.00
30-Nov-2015 MISHRA RAKESH SELL 259000 7.25
10-Jul-2015 J P M S L A/C COPTHALL MAURITIUS INVESTMENT LTD SELL 271929 8.00
07-Jul-2015 J P M S L A/C COPTHALL MAURITIUS INVESTMENT LTD SELL 223158 8.03

 

Overview:

  • The Company is principally engaged in computer programming, consultancy and related activities. It was established in 1994. It operates in two key technology segments ~ Core network infrastructure and mobile payments.
  • The Company focuses on the telecom sector through its XIUS brand.
  • Through XIUS, the Company offers personalized and specialized services, including computer software design, computer systems analysis and systems integration, to bring solutions to its clients.
  • With Headquarters in the USA, XIUS offers solutions in the areas of mobile infrastructure and services, and mobile banking and payments.
  • Megasoft has offices in the US, Singapore, Malaysia and in Hyderabad & Chennai in India.
  • The company has filed 120 patents, with 35 awarded to date.
  • XIUS Infrastructure solutions process and manage in excess of 350 million calls a day and the mobile payments solutions manage over $US 1 billion worth of payment transactions monthly.
  • The company has received the title and has completed the registration formalities on May 23, 2015 for lands situated at Madhapur (0.75 acres) and Nanakramaguda, Hyderabad (acquired through amalgamation of VisualSoft Technologies Limited in 2006) allotted by TSIIC (previously APMC).
  • Out of 15.61 acres originally allotted at Nanakramguda, Hyderabad, as per the directions of Government of Telangana the Company surrendered an area of 7.29 acres and retained the balance land. The said land is located at Nanak Ram Guda abutting Hyderabad Financial District, which has become a centre for the back office operations of several premier Indian and global financial institutions. ~ Megasoft parts with land for Google campus
  • The company has started investing in new products ~ 4G LTE, NFV (Network Function Virtualisation), Predictive Analytics, Mobile based Payments Bank etc.

Management:

  • Mr  G. V  Kumar is the Managing Director & Compliance Officer

None of the promoter’s holding is pledged

Sr No. Major Non-Promoter % Stake
1 I Labs Venture Capital Fund 8.5
2 Srinivas Raju D 1.69
3 Rakesh Mishra 1.71
4 Satyavathi Dendukuri 1.89
5 Ashish Dhawan 2.65
6 Venkataraman Kumar Gandaravakottai 5.03
7 Godavari Greenlands Pvt Ltd 3.04
8 Sri Power Generation (India) Private Limited 4
9 Venturetech Solutions P Ltd 1.04

 

Consolidated Financial Trends ~ Amt in Rs Crs


Particulars

15 months ended March 2015

December ended
FY 13

December ended
FY 12

December ended
FY 11
Equity Paid Up 44.27 44.27 44.27 44.27
Networth 170* 211 214 214
Long Term Debt 0.01 0.14 0.22 0.32
Total Sales 101 106 115 150
PAT 0.73 2.69 1.17 17.5
EPS (Rs) 0.16 0.61 0.26 3.95
Book Value (Rs) 38 48 48 48

 

  • *Certain advances made by the wholly owned subsidiary company prior to 2007 have been set-off to retained earnings by that wholly owned subsidiary.
  • The Company lost its prepaid system contract with its largest customer by the end of 2011. The full year effect of this was felt in 2012, which resulted in a 22% decline in the revenues in FY 12 and further decline of 25% in revenues in FY 13.

 

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