»5 Minute Wrap Up by Equitymaster

On This Day - 26 APRIL 2019
This Future-Ready Company Is Our Next Recommendation

Sarvajeet Bodas, Research analyst, The 5 Minute Wrapup

This month's recommendation reminds me of a famous song written by Bob Dylan - The Times They Are a-Changin.

Although this song was written in 1963, it's more relevant now than ever.

In a way, it's an anthem for a future where change is the only constant.

Just look around... You will understand what I mean.

I mean, we are talking about electric vehicles (EV) and driverless cars. OEMs are committed to producing a variety of EV models in the coming years. Similarly, self-drive testing is also underway.

{spaceads1}

Then, there's the new way through which media content is delivered. It's known as OTT or over-the-top. Here, content is delivered via an internet connection rather than through a traditional cable/broadcast provider.

Not to mention, 5G technology is coming in a big way. This will dramatically improve internet speed. Response time will also be much faster. It will be the connective tissue for the Internet of Things (IoT), autonomous vehicles, and mobile media.

We are clearly at the threshold of a new era...

An era where technologies such as robotics, artificial intelligence, virtual and augmented reality, and IoT will define our future.

Are You Future Ready?

These technologies have compelled companies to transform their businesses to meet changing consumer expectations.

It became imperative for companies to be agile and adaptive. It's essential for them to have a deep understanding of emerging technologies.

What if there was a company which helped organisations become future-ready?

That would be in a great position for massive growth.

And guess what - the good news is we've found exactly such a company.

In fact, the mission statement of the company is about helping its clients become future ready.

In order to help its customers become future-ready companies, this company itself became one.

{inlineads1}

Over the years, it has invested heavily in key digital technologies. This includes the likes of artificial intelligence, extended reality, and automation.

Similarly, the company has also invested in developing products and solutions that leverage digital technologies. This includes key verticals such as automotive, media and communication.

Let's take the automotive vertical, for example.

The company is developing its own intellectual property in the autonomous driving (driverless car) space. And in fact, last year, the company has licensed it to one of the big auto OEMs.

For this company, the key growth driver is the pace of technological change.

If the technology is static, then that's bad news for the company.

But that's not the case.

Technology is as dynamic as it's ever been.

What's more, the stock has seen a correction of more than 35% from its highs. Finally, the company is available at reasonable valuations now.

We published a detailed recommendation report for this fantastic opportunity just last night.

If you are a Smart Money Secrets subscriber, you can read it here.

If you haven't signed up for Smart Money Secrets yet, go ahead and do so here.

And cheers to the future!

Chart of the Day

This month's Smart Money Secrets recommendation scores well as far as financials are concerned.

Look at this chart...

High Growth + Healthy ROE+ Robust Margins =Strong Financials

The company has a strong balance sheet with zero debt. Similarly, the company is in a sweet spot considering strong revenue growth and healthy return ratios.

Due to its presence in a niche area and strong domain focus, the company has an average EBITDA margin of ~24%.

Not to mention, the company has more than Rs 4 billion in cash.

This will act as a war-chest as the company is actively looking at an acquisition in niche area which would give access to new capabilities and new client base. In a way, the company is future ready on this front as well.

The company scores well in our own proprietary tool - Smart Money ScoreTM.

I believe, the potential upside in this stock is 47%.

We have just published a recommendation report yesterday.

If you haven't yet signed up for Smart Money Secrets, you can do so here...

Warm regards,
Sarvajeet Bodas
Sarvajeet Bodas ,
Co-editor and Research Analyst, Smart Money Secrets

PS: This fantastic future-ready company is a great buy right now. Don't delay - you don't want to miss its inevitable rise. Give your portfolio a chance for significant profits - sign up here.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.

Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement

Disclosure & Disclaimer: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. The Author does not hold any shares in the company/ies discussed in this document. Equitymaster may hold shares in the company/ies discussed in this document under any of its other services.

This document is confidential and is supplied to you for information purposes only. It should not (directly or indirectly) be reproduced, further distributed to any person or published, in whole or in part, for any purpose whatsoever, without the consent of Equitymaster.

This document is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity, who is a citizen or resident or located in any locality, state, country or other jurisdiction, where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject Equitymaster or its affiliates to any registration or licensing requirement within such jurisdiction. If this document is sent or has reached any individual in such country, especially, USA, Canada or the European Union countries, the same may be ignored.

This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Our research recommendations are general in nature and available electronically to all kind of subscribers irrespective of subscribers' investment objectives and financial situation/risk profile. Before acting on any recommendation in this document, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the securities referred to in this material and the income from them may go down as well as up, and subscribers may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur. Information herein is believed to be reliable but Equitymaster and its affiliates do not warrant its completeness or accuracy. The views/opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. This document should not be construed as an offer to sell or solicitation of an offer to buy any security or asset in any jurisdiction. Equitymaster and its affiliates, its directors, analyst and employees will not be responsible for any loss or liability incurred to any person as a consequence of his or any other person on his behalf taking any decisions based on this document.

As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst) 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407