SSI Ltd. has reported an excellent financial performance during the year ended June 2000. The company's topline witnessed an increase of 133% and net profits grew by 215%. The bottomline growth was mainly fueled by 530% jump in the other income.
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SSI, is among the top three software training company which offers high end career oriented courses. Besides this it also offers specialized software development and consultancy services. The Company has been expanding fast, geographically, (domestically as well as internationally). In the month of March 2000 it raised US$ 100 m through a GDS issue to fund its expansion programme, which has met with considerable success.
During the year the company's operating profit margins declined to 36% from 37.3% in FY99. However the company has always earned better margins compared to its peers (NIIT and Aptech). This has been possible due to a balanced mix of own and franchisee training centers.
During the year, the company has acquired Indigo International Inc., USA in an all stock deal and Inndsoft Systekh Ltd.,Chennai for a total consideration of Rs 31.5 m. It has also invested a sum of Rs 36.1m for 80% stake in Agenda Netmarketing Pvt. Ltd., Chennai. The acquisition of these companies will enable SSI to gain a major foothold in the software development and consultancy businesses.
At the current market price of Rs 2,455, SSI is trading at a P/E ratio of 55 times its FY00 earnings. The company has premium valuations compared to NIIT and Aptech because it is successfully changing its business model from that of a steadily growing software training business to a high value added software development and consultancy business.
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