Datamatics global....Incorporated in November 1987, DGSL provides IT, BPM, engineering, and big data and analytics services to its customers. The company has also developed products in RPA, advanced analytics, business intelligence and AFC segments. DGSL is headquartered in Mumbai with offices across North America, Europe, Australia and Asia through its subsidiaries. DGSL caters to customers in various sectors such as BFSI, manufacturing, hospitality, publishing, and international organisation, among others. The company is headed by Dr. Lalit S. Kanodia, who is currently the chairman, and Mr. Rahul L. Kanodia, who is the vice chairman and CEO.
Extensive experience of promoters in IT and BPM services industries - Dr. Lalit S. Kanodia incorporated DGSL in November 1987, prior to which he was instrumental in the setting up of Tata Consultancy Services. The operations are currently managed by him, along with his son, Mr. Rahul L. Kanodia, who is the vice chairman and chief executive officer. The promoters, along with the company’s other senior management, have extensive experience in the IT and BPM space, which has helped drive the company’s growth over the years.
Diversified customer profile - Given the moderate scale of DGSL’s operations, its customer profile remains diversified (over 500 customers) across sectors such as BFSI, manufacturing, publishing, hospitality and international organisation, among others. The BFSI and publishing businesses each drove 27% of the total revenue in H1 FY2020, followed by manufacturing (9%), and other verticals (37%) during the same period.
Favourable financial profile given low debt, and healthy cash and cash equivalents - As on September 30, 2019, at a consolidated level, the company had cash and cash equivalent plus liquid investments of Rs. 110.8 crore, compared to a debt of Rs. 23.7 crore. Low debt levels, along with healthy accruals, resulted in strong debt and interest coverage indicators as reflected in total debt/adjusted OPBDITA of 0.4 times and adjusted OPBDITA/adjusted interest and finance charges of 27.6 times during H1 FY2020
DGSL’s consolidated liquidity profile remains healthy, as reflected in its cash and cash equivalent plus liquid investments of Rs. 110.8 crore as on September 30, 2019
There is very long term support for this stock around 40...its now 20% above that support....and if the support holds for the next 2 quarters, then this stock can be considered for small exposure in Covid bear market....for around 4x -5x returns in the next 2-3 years..