Will somebody throw light on the below mentioned report?
Ravi Deshpande
Scripscan:Concurren
Code:531261
cmp:19
Target:100
Percentage:500%
Duration:2-3 years
Concurrent India Infrastructure Ltd is the new name of Kushagra Software (BSE Code 531261). As Kushagra, the company's performance was poor and there is hardly anything worth mentioning about it. It used to trade in software with about 50 crore annual turnover, with negligible profit. The Rs.10/- paid scrip used to quote in Rs. 4 to 5 range.The name change occurred in April 2009. Subsequent to that, a private limited company named Concurrent Infrastructure Pvt Ltd. owned by Mr. Sudhir K Babu was merged with it, as per BSE announcement dated 07 Sept, 09.This merger has brought into company’s fold huge order book of infrastructural projects of Concurrent Infrastructure Pvt Ltd.
K.Sudhir babu:Mr. Koneru Sudhir Babu is the Chairman and Managing Director of the company and has over 15 years of experience in Real Estate, Property and Infrastructure Design and Development. He is a technocrat and holds a degree in Mechanical Engineering from the Mysore University.
Sudhir is young guy of early 40s,dynamic, vision-orientated, focused and a commited entrepreneur with capability to handle several business verticals concurrently.
1) Partner in Navbharati Transports and handled the project as Nako representing for BHEL as Material handling contractor.
2) VTPS Stage IV as Material handling contractor
3) Business Partner for Siemens Business Communication and Motorola for Andhra Pradesh region.
He is the man who revolutionized video conferencing in Andhra Pradesh.A father of 2 who knows only how to work and bag orders.The guy begins his day at 5 in the morning,jogs with the 'MLAs and DGPs" who also are the shareholders and ends the day(the next day rather) at 12.30 midnight.There has been numerous occasions when at around 11.45 in the night am behind the blankets and I get a call from sudhir who is travelling all by himeself in a car from vijaywada to hyderbad to get the deal done.Thats commitment for me guys and thats sudhir the dynamic fellow for you.He is the youngest in his family,got divided to start his own company having just 241 bucks in his pocket.In a short span look at where he reached,look at his connections.
Though the company is primarily in the infrastructure sector, it has positioned itself in Logistics as well as Power sectors which are a fancy of the investors.The company is in process of doing preliminary planning and financial closure towards setting up and owning a 520 Megawatt power plant in Andra Pradesh, which would add to the investor fancy in years to come.The diverse portfolios of the company’s businesses are bound to be restructured, in due course, into subsidiary companies, which may be listed entities with equity participation of FIIs and institutional investors. This would further add to the company’s market capitalization.
1)Their sales was 56cr in 08-09,would be 65-70crs in 09-10,200crs in fy10-11,350crs in fy11-12 and above 500crs for the next fiscal.The NPM would varry in the range of 8-20% for their verticals.So 10%-12% npm we can expect on an average which would transalate into an EPS of 11.5-14 for 2012-13.Now since stock market is a place which discounts future it should quote at 3 figures in 2011-12 taking forward PE of 9-7 conservatively.
2)There are further few things which if understood can give a world of confidence and conviction in the counter.Like they are doing the preferential stuff to the same guys who were the land owners for that 25acre land.Those guys would never sell the shares of the company until they get a minimium price of 100bucks.Now the land value comes superior to the present market cap of the company.
3)Order execution the main threat is actually not a problem here as the company plans to pass the orders to other vendors for executing their projects.Its like you bag your contracts through your rich contacts, charge a decent enuf margin and pass the same to other vendors at half the margin of that.Sudhir is a very influential and visionary guy with huge powerful contacts.This guy works from morning 5 to 12.30 at night.To make the board stronger he is making great influential guys joining the board.
4)You may notice concurrent being in the bulk deals for huge selling from a particular company named ABSOLUTE LEASING & FINANCE PVT LTD.Its a company of MR G.K.Agarwal who was the erstwhile owner of kushagra,he was told to exit the company and thus he offloaded all his 15 lakh odd shares in the market.Weaker hands gone out and I and my group bought the most of his quantity.
5)Concurrent has recently acquired kazi aviation and bagged orders from riyadh airport for handling and maintaince(A JV with the prince of Dubai).This high margin vertical would contribute 150crs topline in the coming few years.
6)Kushagra operations are nearly stopped,Concurrent has sold off kushagra assets and investments to cancell off the 80crs debt.It should be the 1st pure diversified infrastructure company with zero debt and nil interest outgo.Its a great sign of a strong aggresive visionary entreprenur which fascinated me the most.
BTW:I am already a consultant to the company and have suggested the CEO to change its auditors from some local firm to Deloitte.I feel an international audit firm like Deloitte would certainly help the company as far investors confidence and conviction is concerned.After the satyam fiasco I am really apprehensive about balance sheets and thus the suggestion to the company.The suggestion has been taken on good spirit and a change is expected soon on the auditors front.
Conclusion::
Happy Trading,
United we grow!!!
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