At a time, when most small and mid-sized IT companies are still struggling to
recover from the tech meltdown, Pune-based Kale Consultants has returned to
black after reporting a disappointing performance last year. Kale closed fiscal
2001 with revenues of Rs 34.63 crore and a net loss of Rs 6.72 crore. Kale
staged recover starting from the second quarter of fiscal 2002 and finally
closed the year in black.
Kale is focused on product development in the area of airlines and banking,
which contribute a combined 80% of overall revenues. In fiscal 2002, Airlines
contributed to 60% of the revenues whereas the banking segment contributed to
30% with others forming the balance part.
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F A C T S H E E T |
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Website: www.kaleconsultants.com |
Its revenue accounting software, Revera, is also popular in its category and
the company recently won the prestigious ATTIS 2002 Award for the "Best
Revenue Accounting System Provider to the Airline Industry. Based on its
success, Kale has set up a Airline Processing Center (APC) in Mumbai to provide
outsourced services to the airline industry using its proprietary product:
Revera.
Kale is optimistic about BPO offerings. In banking, Kale is currently focused
on the domestic markets with 30 mid market banking clients across 500
installations. Kale’s development center is based in Pune, Mumbai and Chennai
across 60,000 sq. ft with developer strength of 570 equally distributed across
airline and banking segments. The company achieves 80% of revenues from the
exports market. In the year ended March 2002, Kale reported revenues of Rs 49.53
crore, up 43% and net profit of Rs 2.02 crore as against a loss of Rs 6.72 crore
last year. On a consolidated basis, Kale’s revenue stood at Rs 54.21 crore and
net profit at Rs 18 lakh. In the fourth quarter ended March 2002, Kale clocked a
turnover of Rs 15.23 crore and net profits of Rs 1.83 crore. Going ahead, Kale
expects to report atleast 20% growth in the topline and show a net profit of
around Rs 5 crore in fiscal 2003. It has secured orders worth Rs 40 crore to be
executed during fiscal 2003.
Kale trades at Rs 70 discounting the projected March 2003 EPS by 17 times and
March 2004 EPS by 9 times. The company had come out with IPO at a price of Rs
120 per share in 2000 but had declined sharply to touch an all time low of Rs 20
in September 2001. The stock has gained 250% since then. Although the banking
segment is growing, we feel that competition in the segment is immense. The
global airline industry continues to reel under pressure but the company’s
foray into outsourced processing would enable the company to sustain its topline
growth and add to its bottomline. Based on the projected numbers, the stock
seems fully priced but new client additions, mainly in the outsourcing segment
could attract further investments. Market Performer.
F i n a |
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(All |
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2001 | 2002 | 2003* | 2004* | |||
Sales | 34.6 | 49.5 | 60.4 | 78.6 | ||
Other Income |
0.5 | 0.9 | 1.3 | 1.5 | ||
Operating Profit |
-2.2 | 8.5 | 13.2 | 18.1 | ||
OPM (%) |
-6.3 | 17.2 | 21.8 | 23 | ||
Net Profit |
-6.7 | 2 | 4.9 | 8.6 | ||
Equity Capital |
11.5 | 11.5 | 11.5 | 11.5 | ||
EPS (Rs) |
-5.8 | 1.8 | 4.2 | 7.4 | ||
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Sushanto Mitra
is the founder of Technology Capital Partners
The views reflected here are of the author and not of this publication. No
liability is accepted for losses based on the information presented here