Compucom Software Ltd. CMP 16

CMP: 16

Company Profile: Compucom Software Limited (CSL) is a prominent software and education company headquartered in Jaipur, Rajasthan. Started in 1994, the company now works out of its development centers in Jaipur, Redbank NJ (USA) and Atlanta GA (USA). The company is listed on the BSE since 1999. It has two subsidiaries namely ITneer Inc, USA and CSL Infomedia Pvt Ltd, Jaipur.The company has diversified operations ranging from software solutions comprising of software products to domestic and foreign clients, BPO-KPO services and e-governance projects, Learning Solutions including ICT solutions for government schools, preschools and IT training and wind power generation through power plants setup by Enercon India.

Valuation: Having a market cap of 126.16Cr it is trading at a P/E FY11 multiple of 10.8x, the company is expected to register healthy growth in the coming years based on a good order flow and management aggressiveness to acquire more projects. Posted a net profit of 15.25% in the Mar'11.The other companies of the sector like Educomp, NIIT, Aptech and Everonn are trading at one year forward average P/E of 25.0x. Compucom has been a regular dividend paying company since listing. It has provided a 20% discount to the above estimated P/E value the company at a P/E’ FY12 at 20.0x and value per share at Rs. 31. Revenues are expected to grow at 15-17 per cent over the next two years on account of growth in Learning Solutions segment.Profitability to be driven by high volumes from both ICT and
Preschools. A score of 2.5 by CRISIL or above indicates investment grade.