i-flex has been very much in the investor's eye considering the recent successes of its flagship product 'Flexcube' and the market's fancy for IT product companies.
The upward trend in i-flex continued on Thursday as it rose 1.6% to Rs 885 on BSE in early trades. It recovered from the day's low of Rs 865.15. Around 21,900 i-flex shares changed hands on BSE in just half-an-hour of trading.
In the last four trading sessions, the stock has gained 12.2% from Rs 788.40 on 11 January 2003. Earlier, the stock witnessed profit taking after a surge over the last few months. It hit a lifetime (closing) high of Rs 895.55 on 1 January 2003. It then shed 11.9% in 7 sessions to Rs 788.40 on 11 January 2003. The scrip came off after it surged by 98.5% from Rs 450.95 on 26 July 2002 to Rs 895.55 on 1 January 2003.
The company's initiative in the US markets, where it has got a good response, has also boosted the stock, according to analysts. i-flex entered the US markets only recently. The US is a big market for banking solutions and the US entry will prove the key for i-flex's future growth, according to analysts.
Till March 2001, the company was unable to operate in the US markets due to Regulation 'K', that disallowed non-US based software companies with majority holding by an American company. Citigroup holds a 43.19% stake in i-flex through Orbitech. As per reports, i-flex has added six clients in Q3 ended December 2002, with one of these clients being a US financial institution.
Another reason why the stock has caught market fancy is its being an IT products company. The company's key banking solution, Flexcube, has been instrumental in pushing up its fortunes.
Recently, i-flex announced that the Banking and Payments Authority of Kosovo (BPK), which functions as the central bank in Kosovo, selected Flexcube to centralise its banking operations.
Earlier, the company announced that Hebros Bank, among the top five banks in Bulgaria, selected Flexcube to centralise its banking operations and provide the technology platform for accelerating retail-banking operations.
Flexcube has been ranked among the two top selling wholesale banking back-office systems in 1999 and 2000, and among the three top selling retail banking systems in the world in 2000 by IBS. In 2001, it was ranked among the two top selling solutions in both the retail banking and the wholesale banking sales league table.
i-flex Solutions, a leading provider of technology solutions to the financial services sector, derives over 60% of its revenues from high margin products. It is in the business of providing solutions to the financial services industry and its range of solutions includes packaged applications for the financial services industry, custom application software development, deployment, maintenance and support services for financial institutions, and business and IT consulting services in the financial services domain.
For second quarter ended 30 September 2002, i-flex recorded a 69% rise in net profit to Rs 44.95 crore, compared to Rs 26.60 crore in the corresponding period of the previous year. Revenues jumped 43.7% to Rs 136.03 crore (Rs 1.36 billion), from Rs 94.65 crore in second quarter 2001.
At the current Rs 885, the scrip trades at a price to earnings multiple of 18.2 based on its projected financial year 2002-03 earning per share of Rs 48.40. The scrip discounts its projected FY 2003-04 EPS of Rs 65.60 by a P/E multiple of 13.4. The EPS projections are made by a local brokerage.
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