Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Silverline 2QFY02: Lacking shine - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Nov 1, 2001

    Silverline 2QFY02: Lacking shine

    The slowdown seems to have taken a toll on Sliverline’s financials. For 2QFY02, the company has posted a sequential dip in revenues of 21% and the decline in net profits is 21%. On a YoY basis, the company’s topline has declined by 38% and the bottomline has fallen by a significant 72%. These are amongst the most disappointing numbers from the software sector, posted during 2QFY02.

    This steep decline in bottomline is due to falling operating margins. While Silverline’s topline has headed south, the employees costs have remained at more or less the same levels. Even the company’s other costs have been stagnant. The only cost head that has shown a decline is software development expenses, which is variable in nature. Silverline’s employee cost is one of the lowest in the industry at 16% of revenues in 2QFY02. The company earlier had laid off employees and rationalized salaries. It’s operating margins have declined from 36% in 4QFY01 to 26% in 2QFY02.

    (Rs m) 1QFY02 2QFY02 Change
    Sales 556 442 -20.5%
    Other Income 26 59 128.8%
    Expenditure 377 329 -12.6%
    Operating Profit (EBDIT) 179 113 -36.9%
    Operating Profit Margin (%) 32.2% 25.6%  
    Interest 0 5 1772.0%
    Depreciation 29 29 -2.6%
    Profit before Tax 175 139 -20.9%
    Tax - -  
    Profit after Tax/(Loss) 175 139 -20.9%
    Net profit margin (%) 31.6% 31.4%  
    No. of Shares (eoy) (m) 85.7 85.7  
    Diluted Earnings per share* 8.2 6.5  
    P/E (at current price)   5.8  

    However, since the Indian operations contributed only 26% to the consolidated revenues in 1QFY02, the results of Silverline Ltd. tell only a part of the story. The consolidated numbers will give clearer picture. The numbers are not available as yet. As soon as we get them we will update the report.

    At the current market price of Rs 37, the stock is trading at a P/E multiple of 6 times its 2QFY02 annualised earnings. The valuations are likely to see a down side due to the disappointing performance.



    Equitymaster requests your view! Post a comment on "Silverline 2QFY02: Lacking shine". Click here!


    More Views on News

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    Infosys: A Decent Start to FY18 (Quarterly Results Update - Detailed)

    Jul 14, 2017

    Infosys starts FY18 on an encouraging note with a stable performance.

    TCS: Currency Volatility Plays Spoilsport (Quarterly Results Update - Detailed)

    Jul 14, 2017

    TCS starts FY18 decently despite an adverse currency impact.

    HCL Tech: Ends FY17 on Expected Lines (Quarterly Results Update - Detailed)

    Jun 29, 2017

    Volvo partnership caps a good year for HCL Technologies.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    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.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. 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. 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

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Apr 19, 2012 (Close)


    • Track your investment in SILVERLINE TECH with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks