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August 14, 2014

3

Saksoft Ltd. – Multibagger Analysis

by Futurecaps Advisor

Saksoft is a leading provider of Information Management solutions to successful organizations around the world. We deliver success by helping clients to consolidate, organize and manage the vast volumes of data they collect.

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Company URL: http://www.saksoft.com/

CMP: 102.50

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. 30-50% growth every year. image
Durable Competitive Advantage

Yes. Their IM, Managed Services should bring branded & iterated returns.

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Future Growth Drivers Increased customers towards cloud & managed services should boost the income of the company.  We expect tough times for the company around 2016-18 period, exit & re-invest advised during the period. image
Conservative Debt (long term debt < 3 Net Profit) Yes. image
Return on Equity must be Above Average Yes. Above 15% image
Low CAPEX required to maintain current operations Moderate.  Cash flow is negative. image
Management is holding / buying the stock Holding. 75% promoter holding which is impressive. image
Price is Under Valued (< intrinsic value) Yes. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Not really. It might take few more years for the stock to come into lime light, provided there is same growth level. image

Additional Futurecaps Checklist

PE, PB Ratio PE 6 Good PB 1.2 Good (Please note that some sites refer to Standalone PE at 17; while we are considering Consolidated PE & Financial values) image
Cash Flow Positive, Net Profit % greater than 8% Not Positive. Net Profit almost around 8% image
Paying Dividends, Tax Yes image
EPS Growth Rate 40% average.  But latest quarter is not impressive. image
Expected Gain in 5 Years 10. image
Power of Brand Yes. image
Corporate Governance, Reputation of Leaders Yes. image
Fraud reported Nil. image

Declaration

Here by we declare that Saksoft holds multi-bagger properties.  But the recent quarter showing only 10% EPS growth & Latest PE ratio is high.  We have to wait some more time to get clarity on this stock.

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Disclaimer

Futurecaps recommends 20 to 25 multibaggers per year, we recommend a 25% to 50% allocation of your savings in equity.  The stocks recommended here are gone through Analysts of several years experience in stock market.  Although they were successful in predicting future multibaggers, the overall stock market is a risky game.  So we recommend the reader to put his/her own thoughts & invest wisely.

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3 Comments Post a comment
  1. Aug 14 2014

    Super duper analysis. Please share your views on ABM Knowledgeware and Trigyn Technologies. Awaiting your valuable repply

    Reply
  2. Aug 14 2014

    Your earlier pick Orbit Exports has already become 2 bagger…!!

    Reply
  3. Aug 14 2014

    Thank You Bhavin!

    ABM was a good value pick few years back, but I remember the valuations are not attractive for now.

    Trigyn seems to be another good pick; but we have to run a screener on that.

    Reply

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