Aftek Infosys: Powered by Powersafe

Aftek Infosys (Aftek) was set up in 1986 by five IT professionals, all
ex-employees of PCS. Aftek commenced operations developing products, own branded
PCs, IBM PCs, and embedded software. The company focuses on providing software
services and product development in embedded software.

In software services, the company offers customized embedded and systems
software. Aftek achieved 60% of the total revenues in the full year ended June
2001 from software services. In product sales, the company sells PDAs and
smartcards to banks, SMEs, and transport companies. It’s major and most
successful software product is Powersafe, which was gold certified by CA.
Powersafe is a UPS monitoring software product, which is integrated with
Computer Associates’ Unicenter-TNG. Products contributed 30% of the full year
revenues with the balance 10% from local software and embedded products.

Apart from the successful tie-up with CA for marketing and integration of
Powersafe, the company’s US based subsidiary, Aftek Infosys USA, has partnered
with The Enterprise Network (TEN), a silicon valley based non-profit
entrepreneurial resource center providing support for high-tech startups in
partnership with NASA.

In the first half ended December 2001, Aftek reported revenues of Rs. 29.05
crore and net profit of Rs. 16.05 crore, higher by 86% and 115% respectively. On
quarterly basis, Aftek’s second quarter ended December 2001 revenues stood at
Rs. 14.69 crore and net profit stood at Rs. 8.07 crore, up 2% and 1% over the
immediate previous quarter.

Going ahead, the company is concentrating on penetrating the Non US markets.
The company has entered new market in Japan, France, and Germany, and plans to
offer services to more European countries. Aftek’s future growth would be
driven by its products sales, especially Powersafe and new products such as
Jadoogar, WMI/SMS Bridge for mobile computing and storage area network products.

Aftek currently trades at Rs. 403, discounting the projected June 2002 EPS by
7 times and June 2003 EPS by 5 times. The company is well on its way to continue
with its stellar performance, thanks to its focus on embedded software and
success of its product Powersafe. Aftek’s shares have jumped more than 300% in
the past couple of months and we expect the stock to move in a narrow range in
the immediate term. We however expect the stock to outperform its peers in the
medium to longer term. Market Outperformer.

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