About The Company & Business
Palred Technologies Ltd formerly known as Four Soft Ltd is headquartered in Hyderabad.
The
company is promoted by Mr Palem Srikanth Reddy (PSR) a former TDP
politician who later formed his own party named Janapalana Party. PSR is
also a well known social worker.
PSR
was lauded by the local media for fighting against Reliance and the
govt. in KG Basin allotment case where he was a petitioner.
The
company basically into IT Services has last year ventured into Business of E-Commerce via its subsidiary.
The company's E-commerce venture is branded LatestOne.com, company also owns the domain named Deals15.com
which it acquired earlier. In IT Services the company is providing
E-Commerce website and software solutions.
The Ace Investor - Value Pick
PALRED TECHNOLOGIES LTD.
NSE: PALRED - BSE: 532521
Company
listed on both NSE and BSE was trading at 21 on GTS day and now trading
around 24 with a market cap of around 100 crores, Stock went down after
touching 52 week high of 29.40 on Friday (24 Apr) due to bad results by
Infosys.
Promoters hold 46.96% stake in the company, increased from 23.92% in Jun quarter.
FIIs
have increased their stake to 1.89% from 0.44 in Jun quarter. Noted
investor Ashish Dhawan owns about 3.44% stake in the company.
The company is debt and pledge free.
LatestOne.com
is a portal mainly for smart-phone, mobile and tablet accessories such
as Covers and Sleeves. The company has recently added a new section
where all type of cables such as (HDMI, VGA, DVI, USB, Adapter, Charger
and many more wide-range of cables can be purchased online by the
tech-savvy Indians.
LatestOne.com
has updated the website and recently added more categories such as
Mobiles,Tablets,Computers,Laptops and more stuff like computing hardware
etc.
This
appears to be in the works as new products have not been added yet and
the company looks aggressive about its plans which is a positive factor.
Major
unlisted players like Flipkart Snapdeal have been cashing on the
E-commerce boom in the country by raising huge sums of money from
private equity investors. However these companies have been reporting
losses due to the wide product portfolio they posses and the marketing
and promotion cost they are incuring.
As
Palred has reported to the exchange, LatestOne.com on April 15th
confirmed to sell more than one lakh mobile covers which should be
enough to give us an idea about the company's and the website's
prospects. Point to note is that LatestOne.com went on air only on
Nov/Dec 2014 and selling more than one lakh Mobile Covers in just under 5
months is a great achievement.
LatestOne.com
has last week announced a tie-up with IndiaPost for pan-India cash on
delivery services which will expand its reach to even rural India.
Almost
everyday a new smart-phone is being launched, according to the data by
International Data Corporation almost 81 million smartphones were
shipped in the year 2014 and smart-phone sales are expected to touch 150
million units mark in 2015. The future growth of the smart-phone market
is expected to be huge since there is a large base of mobile services
users already and the smart-phone adaption is increasing. There are no
IFs and BUTs in the fact that the future of smart-phones and it's proxy
product Mobile Accessories which actually is a high-margin business is
extremely bright.
The
company's promoter are good and have been investor friendly. There is a
share capital reduction planned up by the company which proposes to
reduce the share-capital by 60% which means if you buy 1000 shares of
Palred only 400 will remain in your account and the rest will be
purchased back by the company at 16.50 and the funds will be credited to
your bank account and the market will adjust the price accordingly. I
think it should not be a big issue for the investors since there is more
into the company's fundamentals than what meets the eye from reported
results.
Palred
Technologies which via its subsidiary is into E-Commerce has not
reported its consolidated results for this FY after its E-Commerce
venture started. Which is why you see ordinary financial performance and
a P/E of 38. The company has responded positively to all our queries
and have clarified that they will announce the full year consolidated
results this quarter which means great revenue and earnings of
unreported e-commerce to be reported all of a sudden? This is quite
similar to how Intrasoft suddenly reported a sales boom in Dec quarter
and the share prices shot up from Rs 40 to Rs 310 to trade at a P/E of
almost 70.
E-Commerce
is a sector where there are not too many investment opportunities and
that is why they all are trading at rich valuations. Be it the 70 P/E of
Intrasoft or the 70 P/E of Info-Edge
(Naukri.com/Zomato.com/99Acres.com).
The
E-Commerce boom is much talked about and it is good to find a
opportunity to make a investment in this booming sector. Remember this
company which directly is into E-Commerce is also indirectly into
E-Commerce by selling web development, interface and softwares to
companies which are looking to tap the E-Commerce.
There
are some rumors too that MTR Foods (Giant in it's field) is planning to
launch an online store and has purchased the software and services of
Palred Technologies Ltd.
Technically too the stock is looking extremely bullish.
All
in All i feel, this is one great opportunity for everyone who missed
Intrasoft rally (40 to 310) and at 24 or even at 40 i would not hesitate
to buy Palred Technologies and hold it maybe for some multibagger
returns?
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 Palred Technologies Ltd in my portfolio and hence my point of view can be biased. Readers should consult their financial advisory before any investments.
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