SSI reported more than 300% jump in profits on year on year basis for the first quarter ended September 2000. However, compared to previous quarter the profits of the company have shown a de-growth of 11%. The company's operating margin declined sharply due to higher expenditure on infrastructure set up and higher staff cost.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted number of shares (m)
Diluted Earnings per share*
P/E (at current price)
During the quarter, the financial services verticals (banking and insurance) contributed to 21% of revenues, the securities and telecom contributed 15% each and healthcare contributed 1%. The company earned about 32% of its revenues from providing e-business related services to large clients, It has added 18 new customers during the quarter taking the number of active clients to 36. Four clients each contributed to over 5% of revenues and the revenues from top 5 clients accounted for about 38% of total revenues. Thus the company faces the risk of high client concentration.
The company's software solution business contributed 35% of total revenues. The operating margins of the company is expected to improve with the increasing proportion of software services business.
At the current market price of Rs 2,130 SSI is available at a P/E multiple of 25 times its 1QFY01 annualised earnings.
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