hi

RSSOFTWARE: A long term view

RS SOFTWARE
RS Software is a medium size software company based in Kolkata. The company's major focus is on the online payment industry since it's inception in 1991. Apart from this, the company also indulges in development of application for Software companies. Let's start of with a peek into the company's financials.

Growth Measurement
  • The company's revenues are growing at a 5 year CAGR of 16.29% from Rs. 149.57 crores in FY 08-09 to Rs. 318.16 Crores in FY 12-13.
  • The company's margin have improved over the years and now the Net profit margin stands at a healthy 11.92%
  • The company is able to sustain a good growth in revenues, the YOY growth bein 20%+ from the past 3 years. This is complimented by the healthy margin being maintained.
Balance Sheet Highlights:
  • The company continues to be a ZERO-DEBT company.
  • The reserves of the company have risen from Rs. 8.79 crores in FY 08-09 to Rs. 111.79 Crores in FY 12-13.
  • The equity of the company is around Rs. 12 Crores.
9 Months Highlights:
  • For the 9 Months ended Dec '13 the revenues of the company were Rs. 265.37 crores and profit after tax Rs. 35.18 Crores.
  • The net profit margin was 13.5% approx.
Going forward:
We await the 12 months result for the company and as per our view the company could report revenues for the 4th quarter at around 80-85 crores which means that the revenue for the 12 months ended 31st March, 2014 stand at Rs. 345-350 crores. But instead of speculating the results we need to look at the bigger picture.

Key Points:
  • P/E: 5.4
  • D/Y: 1.9%
  • EPS (FY 12-13): 31.32
  • EPS (9 Months 31/12/13): 28.5
The overall fundamental valuations are very attractive for this mid-size software company which has a market cap of around Rs. 235 crores.

NEGATIVES:
  • Promoter Shareholding is just 38.5%
  • Of the 61.5% public shareholding, just 6.5% is of FII's and Mutual Funds.
  • Retail Shareholders have a major holding
  • Family Owned model:
From various platforms on the internet and after reading the views of employees, we have noticed that the company is a family run business, though the employees are generally satisfied.
  • Few projects have larger share of revenue:
This point again has been noted from reviews of ex-employees and current one's that the company has few large projects on which the major chunk of the revenue depends. This means that if the company looses any of it's big projects, there can be a sharp fall in the revenues.

We have personally entered the stock this month and would like to wait for this years results and annual report for a stronger view. Overall, we are bullish on the long term prospects of this stock and would add it to our long term portfolio. This post may be updated at later stages as news and views develop.

1st April, 2014 and ahead: Stocks to watch

HUL
HUL (Weekly)
Stock: HUL
This is the weekly chart of Hindustan Unilever Limited. From a technical prospective, the stock after consolidation has formed a bottom of it's fall from 720 to 540 levels. The stock has closed above it's weekly pivot of 590. Today, the stock closed around 610 levels. Positional traders can go LONG in HUL for levels of 720. Add on dips (if any) in the 580-590 zone and hold with SL of 550 for 720 levels and even higher.


AJMERA
AJMERA
AJMERA on the daily charts appears to have formed a double bottom and broken above it's previous pivot high. BUY @ 57, SL: 53, TGT: 65. Trade as per risk capacity as SL is big.

JMFINANCIL
JMFINANCIL
JMFINANCIL saw a spurt in volumes like many other banking licence candidates in today's session. We have adviced a positional LONG a few months back at 25 (Risky). A short term trader can BUY at 28. SL: 27, TGT: 30. The stock crossing 32 will be a strong breakout for good positional play.

MPHASIS
MPHASIS
Mphasis has broken above the falling trendline resistance at 420 levels. Short term traders can go LONG at 427 levels with SL at 420 for target of 441-442. There is resistance for the stock in the 445-465 zone. This stock can be a good positional above 465 (Closing Basis).

NIIT
NIIT
NIIT saw a strong spurge in volumes today as it gave a breakout above 30.5 levels. The stock close at 31.4. Support exists at 29. One can go long in this counter for target of 36.5-37, SL: 29.

SHAKTIPUMP
SHAKTIPUMP
Shaktipump has broken above resistance in the 79-80 zone with a rise in volumes. Watch this counter for a close above 88. Currently at 84, it could test 88 levels. Once 88 breaks, the next target is 95.

THOMASCOOK
THOMASCOOK
Thomascook has broken above resistance at 92 levels. The stock is now in a BULL zone and could head towards 110 levels. BUY at 98, SL: 92, TGT: 110

WOCKPHARMA
WOCKPHARMA
Wockpharma hit upper circuit on 2nd April and saw a huge rise in volumes. The stock has broken above crucial resistances. The stock could head higher and test 600 levels. Buy @550, SL: 525, TGT: 600.

MONNETISPA
MONNETISPA
BUY at 88.5, SL: 85, TGT: 96. The chart clearly shows a breakout in this stock. The stock is seeing strong accumulation since March '14.

ORIENTBELL
ORIENTBELL
Watch for a close above 53, the stock head for 63 levels above that. SL at 49.

BFINVEST
BFINVEST
BUY BFINVEST at 66 with SL of 60 for target of 78-80. The stock has broken above it's 2 year long resistance with a good rise in volume.

DEN
DEN
DEN looks set to continue it's rally. With a SL of 180, the stock can touch targets of 210 levels in the coming sessions.

GMDCLTD
GMDCLTD
GMDC has given a breakout above 131 levels. The stock can see upside from here as long as 123 holds. The textbook target for this breakout is 138. SL for the same can be put at 128.


TCI
TCI
TCI has been in consolidation since Jan '14. The stock has given a breakout from this consolidation with a spurt in volume. BUY TCI near 111, SL 103, TGT: 127+

24th March, 2014 and ahead: Stocks to watch

ARVIND
ARVIND
Arvind has given a strong breakout above the 159-161 zone with a huge spurt in volumes. The stock has potential targets of 185. BUY at 165, SL: 158, TGT: 179-180 levels.

AUROPHARMA
AUROPHARMA
Aurobindo Pharma breaking above 545 levels can see the stock head to 600-610 levels. Support exists at 525-530 levels.

ABAN
ABAN
ABAN is breaking out from consolidation after 2 months. The stock could move upto 550 with support being at 480 levels. One can trade these levels as it appears a strong pattern.

BAJAJCORP
BAJAJCORP
Bajaj Corp is breaking out of 200-225 range. The stock currently at 232 levels can test 250 levels. Support exists at 224.

CENTURYTEX
CENTURYTEX
If CenturyTex breaks below 335, we can see it heading down to 327-/320 levels. The stock is an up channel. If it breaks above 355, we can see a strong upmove in a short time.

JSWENERGY
JSWENERGY
If the stock manages to break above 58, we can see it zoom to 68-70 levels. It's a good stock to track this week.

RCOM
RCOM-Weekly
The weekly chart of RCOM gives a textbook target of 150 if the stock manages to break above 128. BUY above 128, SL: 121, TGT: 142/150+ (Levels can vary)

SINTEX
SINTEX - Weekly
Sintex has broken out of afalling trendline on the weekly charts and also closed above the resistance of 41 (Purple Line) which suggests that in the medium term we can see the stock getting strong. Watch out for trading opportunities.

ADHUNIK
Adhunik
 Adhunik is in a strong uptrend and has given a break above 43 levels and is finding support at the levels of the rising blue trendline. BUY the stock near 44.5 levels with SL at 41.8 for upsides of 50-52 levels.

AHMEDFORGE
AHMEDFORGE
 The stocks is retesting it's breakout levels of 122 after creating a high of 140.9. Keep an eye on the stock for signs of support near the 118.5-120 levels for a trade upto 135-140 levels.

ASHOKA:
ASHOKA
 BUY Ashoka near 75 levels with SL of 71.5 for targets of 84 levels. Be careful as the stock is a little low volume stock.

BANCOINDIA
BANCOINDIA
BancoIndia has given a breakout above 60 levels. Currently trading at 64 levels, the stock can show sharp upmoves once it breaks above 67.5 levels.

CEAT
CEAT
 Ceat has continued to move upwards and has recetly broken resistance with big volumes above 415 levels. Currently at 445, we could find good trading opportunities on any dips seen in the stock.

GSFC
GSFC
 GSFC is in a multiyear downchannel with the upper range near 55 levels. Track this stock for a close above 55 for big trading opportunities.

IFBIND
IFBIND
 IFBIND is another breakout stock which can give good trading opportunities if we see the stock sustain above 84 levels with 15,000-20,000 volume of shares. This stock is also a thinly traded counter and so keep quantity low.

IMFA
IMFA
 IMFA has broken a multiyear range bound move with a break above 240 levels. Currently near 247 levels, BUY the stock with SL at 234 for targets of 273-275 levels. In the coming months, we can see the stock move upto 390-400 levels.

JKTYRES
JKTYRES
JKTYRES is another breakout tyre stock which has given a good breakout after retracing upto 50% of it's Sep '13 to Early Jan '14 rally. Track the stock for a move above 182 levels for good trading opportunities.

MONNETISPAT
MONNETISPAT
Above 96, we can see Monnetispat move to 114-115 levels.

RML
RML
 Currently at 141, BUY with SL at 135 for targets upto 151. This stock is thinly traded, so keep the quantity low.

SARDAEN
SARDAEN
 Watch this stock for any break above 111 levels for a strong 10% upmove. Caution, This is also a thinly traded stock.

SUMMITSEC
SUMMITSEC
 The stock is a low volume stock and we can see further upmoves in it as long as it sustains above 115 levels. Wait for a dip near 120-122 levels for trading opportunities.

TEXRAIL
TEXRAIL
 Watch this stock for a move above 48 levels. It could move to 53-55 levels.

VARUNSHIP
VARUNSHIP
 BUY at 7.5-7.6 levels with SL at 7 for targets of 9.

VSTTILLERS
VSTTILLERS
 The stock is moving strongly northwards and a break above 940 can see the stock rush towards 1000 levels. BUY above 940, SL: 920, TGT: 980/995-1000

ZICOM
ZICOM
ZICOM has broken out from it's downchannel. The stock, currently at 63.65 levels can be bought with SL at 61.5 for target 67.5.

Subscribe via email: