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
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
posted by Shankar Nath at 11:27 PM
4 Comments:
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).
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
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
Excellent content - as you always provide and inspires me to come again and again. You are on my RSS reader now.
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