X

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.
Mascon: Will it deliver? - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 17, 2000

    Mascon: Will it deliver?

    MASCON is the acronym for MAnagement and Systems CONsultants Ė a company that claims to have capability to provide end-to-end solutions for e-business i.e. skill sets that range from consulting to development and support for e-business solutions. Not many talk about getting into consulting that is where Mascon is different from others. But the catch is that the strategy consulting is outsourced.

    Masconís focus is on telecom, a vertical that is catching everybodyís attention. This interest is primarily due to the fact that the area is very promising in terms of growth and has high entry barriers in terms of required skill set. It plans to develop application servers for soft switches (software based switches that will connect all different kinds of net works like WAP, Internet, PSTN).

    It also has an ERP product, AIMS that is basically for manufacturing organizations. The CEO, Mr. Nandu Thondavadi, is a clinical professor of operations management at Kelloggs. And with his expertise perhaps, the ERP was developed. The ERP has a web-enabled module that allows the customers to directly order over the Internet. But the company does not have a USP (unique selling proposition) in this segment.

    Another very interesting area that they operate in is data mining and data warehousing. Mascon is acting as an implementation consultant for products like BroadVision (a product that allows the user to set criteria for searching) and TIBCO (a product that captures the knowledge from the data and implements the actions based on the predefined rules). This is by far the best source of growth for the company because when B2C catches up, there is going to be a great demand of skill sets like these. Walmart is already using this product and the implementation is handled by Mascon.

    But the area in which the company has a lot of experience is software development. It is working on a clearing system for Master Card, software that will handle about 24 million transactions per day. A company that can implement a solution of this kind has certainly a good technical know how. If it can do this successfully then it can become a force to recon with.

      9 Month ending
    September 99
    9 Month ending
    September 00
    Growth
    Revenue 302 2340 674.9%
    Staff Cost as % of Revenue 53.8% 38.0% -29.4%
    Consultancy Charges as a % of Renvenue 4.3% 25.9% 508.0%
    Operating Margin 17.2% 22.1% 28.5%
    Net profit margin 17.2% 20.5% 19.5%

    But, let us look at some numbers. The companyís revenues jumped year on year by nearly 700% for the nine months ended September 2000. Nothing amazing, many emerging small IT companies have this kind of a growth. However, Masconís operating figures at 21% are way below the industry benchmark of around 30%. But the biggest issue for the companies like this is internal management and delivery when they begin to grow.

    At the current market price of Rs 420, Mascon is trading at a P/E of 18 times its nine months annualized earnings. What is hurting the companyís operating profit growth is the outsourcing of consultancy charges. If the company is planning deliver end-to-end solutions it canít afford to out source consultancy, which can depress its future profits margins.

     

     

    Equitymaster requests your view! Post a comment on "Mascon: Will it deliver?". 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

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    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.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    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

    TRIGYN TECHNOLOGIES SHARE PRICE


    Aug 17, 2017 12:14 PM

    TRACK TRIGYN TECHNOLOGIES

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

    MARKET STATS