Helios and Matheson Information Technology Ltd. - Sunidhi Securities & Finance Ltd

HMITL's increasing focus on BFSI, Healthcare and Technology verticals, strong USA and European presence, deep client relationships, sustained infrastructure, sales/marketing investments, a world-class knowledge-network set up give strong visibility to revenue & profitability going forward.

At the current market price of Rs. 52, the share is trading at a P/E of 3.1x on FY13E and 2.3x on FY14E.

Sunidhi recommends BUY with a target price of Rs. 75 in the medium term.

Outlook:

Over time HMITL has built a strong USA and European presence and deep client relationships. Sustained infrastructure and sales/marketing investments over the last 22 years have helped create a world-class knowledge-networked work environment that empowers HMITL's team to provide high quality solutions to clients.

HMITL has 22 years of consistent dividend payments and over 66% of its paid-up capital is through bonus issues. Its FCCB was redeemed in a single direct payment of over `100 crore.

HMITL derives a majority of its revenues from the US market and focus primarily on the banking, financial services, healthcare, and technology verticals. Its IT infrastructure is in place for the next two years, it does not envision any Capex beyond routine replacement, which can be funded through internal accruals.

Source : Equity Bulls

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