The Chennai based It solutions company, Zylog Systems Limited, founded in 1995, is basically involved in provision of IT services to its clients that involve solutions for consultation and staffing and other product solutions. The company derives its major revenues to up to 65% from staffing and consulting solutions and its activities are majorly concentrated in the US and Canada.
The major contributor to the growth of the company has been the acquisition activities that it has taken in the past which made not only the geographic reach larger but also gave it enough opportunities to cross sell and widened its offering base. The company has an excellent track record of great acquisitions like the complete transformation of the Canadian company, Brainhunter, which was essentially involved in staffing, in the very year it was acquired.
Reports suggest that this kind of inorganic growth is to continue for the company as it is looking at making 6 more such acquisitions, the bids of two of which have already been made and results are awaited.This suggests that the management is making fast moves and also shows interest in the product expansion side where they are trying out certain e-governance projects and Wi-Fi Internet solutions in South India.The only risk seen is the huge fund management and integration issue that the company is likely to see with more and acquisitions.
Bell the Bull says: The current price at which it is trading at the NSE is more than Rs.200 below our expected price of Rs. 350-400 seeing the present and future prospects of the company.