Stock Outlook: Polaris Software Limited

by khalid on 03/09/2011 · 0 comments

The company is directed towards the delivery of comprehensive IT products and services basket and is presently showing an annual growth of 23% when we take the revenues into account. The growth of the services sector has been phenomenal at the rate of 73% in the past year.

The present boom situation in the IT sector can be seen as a positive aspect for the stock. The stocks expected revenue is expected to hover around 23% for the next two years. With the present situation of the BFSI Sector, the growth is likely to persist and grow further. Polaris is expected to have more of inorganic growth which will eventually lead to expansion of the products and services of the company. But the risk factors that can be associated with the company are increasing concentration to a single service group, BFSI and very limited number of clients that help the sustenance of general business activity. This inorganic growth can be supported very well by the Rs. 5 billion of net cash standings.

Another big positive aspect of the stock is the very recent acquisition of the US Company it made, Identrust Inc.,  it made to enter the cloud computing space.The decline in the PAT over the past two years can be attributed to mainly the rise in taxation. The volumes of the stock traded were pretty much good.

Bell the Bull says: The fair value estimated of the stock stands at Rs. 235-240 but it presently lies within the band of 180 and 200.

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