Aztec Software and Technology Services: The Aztec Warrior?

Fact Sheet

  • Website:

  • Address: #23,
    3rd A Cross, 18th Main, Koramangala Block 6, Bangalore 560 095
  • Tel.: +91
    080 5532036, 5522892
  • Fax: +91
    080 5521987
  • Area of specialization: Application
    Integration and Software Product c8o Development
  • Revenues
    (March 2001) Rs 80.66 crore
  • Offices:
    India, US
  • Listing (stock exchanges):
    Mumbai Stock Exchange, National Stock Exchange & Bangalore Stock
  • Face Value:
    Rs 3 per share
  • 52 Week High/Low:
  • BSE Code:
  • NSE Code:

Aztec Software and Technology Services (Aztec) was set up by
S Parthasarathy in 1996 and made its initial public offer in November 2000
offering the Rs. 3 face value shares at a premium of Rs. 77 per share.
Parthasarathy currently holds about 12% of the equity whereas e4e Holdings,
a wholly-owned subsidiary of e4e holds about 40% of the equity.  Mutual
Funds and Domestic Institutions hold 2%, employees plus the ESOP trust hold 26%,
public holds 9% and other individual and corporate bodies hold the balance 11%.

Aztec provides e-engineering solutions and works as a product
co-development partner to major US companies. Aztec has expertise in core
database technologies, data warehousing, XML and Java Technologies. Aztec
leverages its expertise in these areas in providing services in the Internet
middleware space. The company builds infrastructure that underlies the solutions
being built by its customers.

Initially, the company provided solutions to ASPs, B2B
companies and Internet start-ups. With the slowdown in the technology space,
Aztec has started targeting the net-centric needs of enterprises by providing
application integration services. This includes integrating the networks and
application of an enterprise with those of its vendors.

The company is engaged in providing co-development services
for products being built by software product companies. Revenues from these
areas have improved over the past two quarters whereas those from e-engineering
have declined due to a sharp fall in technology investments which was triggered
by the slowdown in the US and worsened by the recent terrorist attacks. The
company is currently focusing on application integration for enterprises and
expects this segment to improve in the next fiscal.

Aztec has a development center in Bangalore and operates from
Santa Clara, US. Aztec’s closed fiscal 2001 with consolidated revenues of Rs.
80.66 crore and a consolidated net profit of Rs 18.55 crore, up by 430% and 466%
respectively. Aztec’s major clients include Asera, Embarcadero, Microsoft and
Jamcracker, with the top 5 clients generating 72% of the revenues in the first
half ended September 2001.

figures in Rs crore)
  2000 2001 2002* 2003*
Turnover 15.2 80.7 68.8 64.9
1.3 1.1 7.0 5.0
3.4 18.2 25.4 22.6
OPM (%) 22.1 22.5 26.7 27.0
Net Profit 3.3 18.6 17.1 10.9
Equity 3.3 12.1 12.1 12.1
EPS (Rs) 3.0 4.6 4.2 2.7

Year ended March 31

Aztec is currently traded at Rs 58 discounting the projected
March 2002 EPS by 13 times and March 2003 EPS by 21 times. We expect limited
upside in the share price in the immediate term and expect the stock to under
perform until the announcement of the fourth quarter results. Market

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

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