Dhanus Technologies Limited IPO Message Board (Page 29)

if its new product hit then it is big star otherwise expensive.

Dhanus Technologies (IPO): Avoid - Hindu Business Line Report

Investors can stay away from the Initial public offer of Dhanus Technologies (Dhanus), given the high competition in its business segments and relatively high execution risks.

At the upper end of the price band (Rs 295), the offer values the company at about 17 times its trailing 12 month earnings, without factoring in the equity dilution due to the offer.

This appears stiff in comparison to stocks of smaller telecom and software services as well as large hardware companies.

At the higher end of the price band, the company will raise Rs 113 crore from the offer to finance fresh equipment for its fleet tracking business and augment infrastructure facilities in its IT and BPO divisions.

Strengths:

1.There has been a dramatic growth in Indians travelling abroad, and their number is estimated to reach around 35 million passengers by 2010. Has sold over 1.68 lakh global calling cards in the year ending March 2005 (FY 2005), 2.25 lakh cards in FY 2006 and, 4.68 lakh cards in FY 2007, and 8.62 lakh cards in all till end June 2007. Has a VoIP-based phone service targeting Indians in the US. The market for this service is also growing.

2.Has received registration for setting up a vehicle tracking system using vehicle mounted unit (VMU) with an in-built SIM card with GPRS capability to work on global positioning satellites (GPS) from the Department of Telecommunications, Ministry of Communications & Information Technology, government of India. Has also tied up with Airtel to provide GPRS service, which is operational. The Delhi office has started marketing the service.

Weaknesses :

1.Is yet to receive no-objection certificate (NOC)/license from the Department of Telecommunications for selling international calling cards in India. Also, the track record of the companies with which the directors have been associated is not encouraging. One of the independent directors has a criminal proceeding against him. Apart from this, there are a number of legal proceedings against the company.

2.Does not have its own telecom infrastructure in countries where its global calling cards are operational. Thus, it is totally reliant on the infrastructure of the telecom operators in those countries.

3.Calling card is not a high-tech business and is highly competitive. Although, FleeTrac services has growth potential in India given its usage in transportation, courier, security, police, defense, logistics and supply chain management; the concept of vehicle tracking service is in the introduction stage in the country. Its acceptability and success are yet to be tested. Moreover, the technology used for FleeTrac service is universally available. Thus, there is possibility of new entrants and increasing competition.

4.Profit margin is falling. On a standalone basis, telecom service’s profit before interest and tax (PBIT) margin dipped 580 basis points (bps) to 19% in the year ending March 2007 (FY 2007) with sales contributing 56% of revenue. Software service had a PBIT margin of 47.4% in FY 2007, down from 66.1% in FY 2006. Contribution to total revenue was 35%. The BPO services contributed 9% to the total revenue in FY 2007, with PBIT margin down from 71.1% in FY 2006 to 61.8% in FY 2007.

UR MONEY, UR CALL.......:-)

DEAR VIKRAM, THANKS FOR ANALYSIS OF DHANUS. WHAT ABOUT G.M.P.OF ALL IPO.

Dhanus Technologies Limited - Apply with short to medium (Broker report)

Peer Comparison
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The peer members of Dhanus Technologies Ltd are Firstsource Solutions, Sasken Communication, IT People India, Tech Mahindra, Educomp Solutions and Rolta India of having PE multiple of 82.77, 36.64, 39.05, 23.44, 152.74 and 22.97 respectively. The Book Value of the above is Rs.21.53, Rs.146.20, Rs.1.66, Rs.72.43, Rs.71.73 and Rs.127.95 respectively.

Company’s Valuation
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In YoY basis Total Income rose from Rs.35.94 crore in Jun’06 to Rs.90.47 crore in FY07 which shows 151.74%% of return. PAT surge to Rs.24.59 crore in FY07 from Rs.13.09 crore in FY06 which is 87.83% rise. The total income CAGR shows 209.74% growth in last 5 years (FY07-FY03). The bottom line grows with CAGR of 252.32% in last 5 year (FY07-FY03). The post issue EPS for FY07 is Rs.13.71 by which P/E multiple on price band will be 20.43 and 21.52 times on lower and upper band respectively. The book value base on post issue equity is Rs.47.94.

Market View
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Market holds no view about this IPO

Comment
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The past track growth seems to be good and also the issue at fair Value. One can invest in this issue with short to medium term outlook.

IS Dhanus Technologies & KAVERI SEED GOOD IPO FOR SHORT TERN INVESTING?

Dear ratilal jadavji shet

Yes right i have posted expert opinion from capital markets..i hold my view of Dhanus and Kaveri being bogus companies...if ur a good analyst kindly go thru prospectus and decide..expert comments r not always worthy of following..

anybody can advice me to apply for Dhanus

dear biggest bear, or KING OF IPO..in your previous msg ,dhanus..was BOGUS company ,and now within 3 days,you are saying apply for long term.when a company is BOGUS..(THAT ACCORDING TO U )..HOW WE CAN ONE INVEST FOR LONG TERM. I ALREADY TOLD U TO WAIT AND LET EXEPERTS VIEW COME ..I THINK AFTER KNOWING RATING OF CAPITAL MARKET U HAVE CHANGED YOUR MIND ABOUT THIS IPO.any how, please dont give any opinion about any ipo in hurry.TAKE IT EASY .

Seems expensive

Dhanus Technologies is entering the capital market on 10th September, 07 with a public issue of 38.35 lakh equity shares of Rs.10 each in the band of Rs.280 to Rs.295 per share. The company presently operates in three areas of business of Telecards, Teleservices/ITeS/BPO and software services and Vehicle Tracking Services.

It has been seen that inspite of negative perception for IT sector and IT Companies and more especially, for big players, the IPO of software and IT companies have been receiving good response. This creates dilemma in mind, whether this appetite would continue and are valuations sustainable?

The company has a suite of customized prepaid phone cards issued and sold in India, U.S., U.K. and Singapore. This segment had total income of Rs.50.32 crores in FY 07 (ending June) with EBIT of Rs.9.54 crores. The company has specialisation of developing software in IP Telephony, IVR Based Business Process Application. This segment had total income of Rs.31.53 crores for FY 07, with EBIT of Rs.14.94 crores. BPO segment had income of Rs.8.42 crores with EBIT of Rs.5.20 crores. Vehicle Tracking Service business having good potential, domestically, is yet to catch on, as it had income of just Rs.12 lakhs and EBIT of Rs.2 lakh.

For FY 07 total income of the company was at Rs.92.54 crores with PBT of Rs.26.30 crores and PAT of Rs.22.17 crores, which has resulted into an EPS of Rs.16.14.

The company has now taken up a capex of Rs.118 crores mainly to build corporate office and network operating centres, ITES, Software Support Services. This is estimated to cost Rs.21.68 crores. Rs.50.52 crores has been earmarked for expanding and improving company’s infrastructure support systems for its ITES and fleet tracking business. However, separate allocation of Rs.37.89 crores, has been made for purchase of equipments for Fleetrac Services. Why this duplication?

The jump in the topline for FY 07 has been about 152% while PBT rose by 107% only. Major revenue earner (56%) Telecom segment is having pressure on its margin as also litigation from established players of the segments. Even software segment had drop in the margin as topline of FY 07 grew by 269% while EBIT rose by just 165%. Fleetrac, which has good potential, is yet to take off.

Present equity of the company of Rs.14.11 crores, would rise to Rs.17.94 crores. EPS for FY 07, of about Rs.16, discounts present issue price by about 18.50 times (upper band of Rs.295 per share). Tulip IT, a company, growing by about 50% on topline and by 100% on bottomline, is ruling at a PE multiple of 18, based on FY 08 earning. There have been concerns about the company, due to so many litigations initiated and pending. Even growth on topline is compromised with margins. So, post issue, the growth is likely to come at the cost of margin pressure. Main telecom business, may have fall in future earnings.

Considering all these, share does not have much room for appreciation for prospective investors. Upside of Rs.350 is possible, in long term within 6 – 12 months. So investors having long term investment perspective in mind can go for it.

Short term or listing gains cannot be predicted.

the capital market rating to dhanus tech is 48 ,how can it be bogus company

Hello All

I think the Ipo offers lot of value to retail investors as this company is in a very niche space( Calling Cards and Fleet Mgmt Systems)and shall go on to be a multibagger

In a leading tamil magazine dhanush tech has been mentioned as a fraud company...Dont invest...

Hi everyone,
I would like to brint to ur notice the broad objectives for this ipo
Object of the Issue
1) Fund the acquisition of property in Chennai city and, construction thereon.
2) Expansion and improvement of the company’s infrastructure support systems by purchase of Network Operations canter equipments for its ITES and Flee Trac businesses.
3) Purchase of equipments such as Development Servers, Workstations, and Software for ITEs agents, and the management team of IteS services.
4) Purchase equipments for Flee Trac services.
5) To set up countrywide network of sales and support offices.

Now after going thru this we can make out that the company is not even having a proper work place and raising money to build an office complex..secondly they want to purchase equipments for Flee Trac services the revenue stream and the clients are unknow..thirdly still to purchase equipments for the services they are willing to provide...how can u trust a company not even standing on its feet and asking for 295 from investors..U certainly cannot trust them bcoz they r not reputed enough...they are raising funds 3 times the last years revenue...riskly affair certainly..apply with a big risk and a heart of steel.....

Hi,

Grey market prices on 05-09-07 in ahmedabad
Dhanus 90/- seller
Power Grid 11.50/- buyer
Kaveri 20/- seller

Dont know where prices are 140-150 for dhanus...no one is willing to buy a share of this company in ahmedabad...cbi investigation is going with the promoters...its a fraud company

As per the article in a Tamil magazine, Junior vikatan, the Company is under incvestigtion of CBI. Please be cautious in investing

if this is avg IPO then why the Greay market premiums are as high as 150+.
it seems at this GMP, the listing price would be around 500.
any one can reflect on this

hai friends this is hi priced skrip

hi,
dont take the views of experts on TV seriously. The so called "experts" told to avoid DLF ipo at 550 and the same experts are asking buy DLF at 600. Let small investors like us taken a decision based our analysis of the companies. views and suggestions welcome

plz tell me abt the company? should retail investor go for it?