Hinduja Global Solutions : A Multi-Bagger Stock

                    HINDUJA GLOBAL SOLUTIONS LTD : A Multi-Bagger Stock

CMP : 520-530

BSE CODE :532859

Market Cap : 1082 Crores

       LISTED ON : NSE AND BSE

TARGET : 975/1060

TIME-FRAME : 12-16 Months

History of the Company :

HGS is a leader in optimizing the customer experience and helping clients to become more competitive. HGS provides a full suite of business process management (BPM) services from traditional voice contact center services and transformational DigiCX services that are unifying customer engagement to platform-based, back-office services and digital marketing solutions. By applying analytics, automation, and interaction expertise to deliver innovation and thought leadership, HGS increases revenue, improves operating efficiency, and helps retain valuable customers. HGS expertise spans the telecommunications and media, healthcare, insurance, banking, consumer electronics and technology, retail, and consumer packaged goods industries, as well as the public sector.

HGS operates on a global landscape with around 44,200 employees in 68 worldwide locations delivering localized solutions. For the year ended 31st March 2017 HGS had revenues of US$ 555 million. HGS, part of the multi-billion dollar Hinduja Group, has more than four decades of experience working with some of the world’s most recognized brands.

Products:

Hinduja Global Solution Ltd's services are used at present in following :

• Automotive
• BFSI
• Consumer Electronics and Technology
• Consumer Packaged Goods
• Health Care
• Public Sector
• Retail
• Telecom
• Travel and Hospitality

Financials of the Company : (Consolidated)

• Profit After Tax (PAT) for the year ended on 31st March,2017 has been reported  at Rs 42.71 Crore and turnover at 940 Crore.
• As per the numbers as on 31st March,2017 the company has generated Return on Equity of approx. 9% , Return on Capital Employed of 11% and Return on Assets of 9%
• The company is a regular dividend paying company and has paid dividend for past 10 consecutive years.
• Debt to Equity ratio is below 1 and is reasonable in nature
• Dividend yield offered by the company at present rate is approx. 3%

Investment Rationale : Why to Invest in this Stock ??

• Shareholding of the promoters in the company is 67.54% as on 30th June,2017 which strongly indicates interest of promoters in growth of the company.
• Cashflow positive for past 3 financial years
• Book value of the stock stands at 654 Rs per share. At current share price it is trading at almost 20% discount to the book value.
• With the Indian economy poised for growth and increased emphasize on digitization of various business functions the company is going to gain immensely out of the same.
• Market Cap to Sales Ratio : 0.29 ( Considering March 2017 sales and current market cap) is very attractive
• At current price of 525 Rs per share and EPS of 86 Rs , the stock is presently trading at an attractive P/E ratio of 6.
• At a forward reasonable P/E of 10-12 and EPS of 100.00, we expect the stock price to soar higher atleast to 1000 and higher levels in coming time.

Disclaimer Note: The above is not a research report but information as available on public domain and it should not be treated as a research report. Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.

Disclosure: It is safe to assume that I might have Hinduja Global Solution Ltd  in my portfolio and hence my point of view can be biased. Readers should peform own due diligence before investing. We do not assume any responsibility or liability resulting from the use of information , judgements and opinions for Trading or Investment purposes on the Blog.