Thursday, February 02, 2006

Found: Website on Teledata Informatics Ltd.

This is one company for which Prasanth and me did many a search. We found the stock ridiculously under-priced ... even now. Request all readers to do an analysis of this stock by yourself. Some of the numbers might trouble you :-)

One important point - There was an issue of bonus shares in the company which has not been given in the BSE announcements (cant understand why) but please factor the same in your calculations. So the equity in the company is rupees 877,690,800 (87.7 crores).

Oops almost forgot .... the website is www.teledatain.com

7 Comments:

Blogger jagadish said...

Teledata is a value trap. This is a great business in hands of bad management. The company has a policy of capitalizing the product development cost, which inflates the net income reported. Looking into EPS or book value is meaningless for this company. One has to look into FCF for this kind of bizs. When I last looked into FCF in March 2005, it was negative, which is a very bad sign (after that co has shown hell lot of growth thru acquisitions, underlying biz is not growing). Regarding capitalization of software development expenses: Microsoft which is a pure product co, I flex which is in same league, both of these co do not capitalize development exp, they book it as expenditure in same period, which will give you the right net profit number. Capitalizing development exp is highly judgmental job imagine what will happen when it is done by bad management (even teledata auditors have commented on this).

5:14 PM  
Blogger Shankar said...

Hi Jagadish,

I peeked into the number once again. What you are saying is true - I noticed the fairly large amounts of monies capitalised which is similar to the nature of "deferred expenditure". (See 'depreciation' in books). So subtracting the depriciation numbers from PBT, we close the year with only 10.7 crores of profits. The company is under bad management - so would like to revisit my previous premise of a value buy. Its a no holds company. Better to be approximately right, than being precisely wrong.

Thanks Jagadish, great input.

Warm Regards, Shankar

10:05 PM  
Blogger kapil said...

i am new to investing & therefore very carefull about the co's.
i first go by P/E ratio & selected some comapany, then i check
about there past half year performace, then i check about
their past 3 years performance, & in that 3 year performance i
check about Bookvalue,EPS,P/E,Net Profit,RONW,ROE,increase in
sales mostly.

After these analysis i come across teledata informatics ,who if you consider
these all is a good buy, i also check about their history by typing words like
fraud, misinformed with tele data name in google, & it show me that
promoter heavily advertised teledata in last feb to april which cause it's
share price increased astronomically.

i am not able to find aby other illegal or misinformed activity associated
with tele data. I also conclude that it has a great potential & can be a next
big company considering the growth expected in Shipping business.

Its frenzy with acquistions i am not able to comprehand properly,but
inclusive these acquisition & their impact in overall balancesheet
i still think it increasing by atleast 10% in almost all the term

My Q's is:

Is my analysis true or not?

5:15 PM  
Anonymous jaw_amo said...

Any idea about indoco rem bought at 340 can it reach 400 in long term.It can hold for 1-3 yrs
I also have tera soft at 66 and ansal housing at 160.Plz advise

4:54 PM  
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