• OUTLOOK ARENA
  • VIEWS ON NEWS
  • JULY 6, 2000

Software revenues drives up Aptech's 2QFY00 profits

Aptech has reported an astounding YoY growth of 44% in its net profits for the 2QFY00. Its revenues jumped 36% to Rs 1.4 bn led by strong growth of 82% in software solution business. However the profit growth is slowed down slightly due to more than 200% increase in the interest expenditure.

Aptech's software business which is a high margin business contributed 17% to its total revenue (13% in 2QFY99). This has also enabled the company to improve its operating margins to 37.3% from 33% in the previous year.

(Rs m) 2QFY99 2QFY00 Change
Sales 1,018 1,389 36.4%
Other Income 1 2 53.0%
Expenditure 682 871 27.7%
Operating Profit (EBDIT) 336 518 54.0%
Operating Profit Margin (%) 33.0% 37.3%  
Interest 3 9 210.1%
Depreciation 45 84 87.8%
Profit before Tax 290 426 47.2%
Tax 31 55 77.4%
Profit after Tax/(Loss) 259 371 43.6%
Net profit margin (%) 25.4% 26.7%  
Earnings per share 41.3 59.4  
(annualised)      

The company's global software solutions business witnessed an increase of 135% to Rs 386 m during the same period. This suggests the strong growth opportunity for Aptech India's software business which is growing by leaps & bound.

At the current market price of Rs 917 (ex-bonus), Aptech is trading at a P/E multiple of 15 times its 2QFY00 annualised earnings. The company has also allotted bonus in the ratio of 1:1 in June 2000 in the current year. The company has comparatively lower valuations than NIIT and SSI due to comparatively lower contribution from software business. However the company is gradually increasing contribution from software business to total revenues which is likely to improve sentiment in the stock.

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 (Research Analyst) bearing Registration No. INH000000537 (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, Canada or the European Union countries, 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 (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