Subex is a software/IT products company. Based in Bangalore, this innovator company offers products and services mainly to telecom service providers. This company pioneered the concept of ROC and implemented it successfully. For more info check, http://www.subex.com/
NUMBERS - THE LATEST
Market cap: 190 crores CMP on Day15 Mar2015: Rs 11 BV: 11 rs.(approx)
Revenue FY14: 340 CR Net profit FY14: (11 cr)loss FV: 10
POSITIVES - MULTIBAGGER POTENTIAL
1. Subex is a turn-around story. Last 2 quarter results are clear indication that the company is turning around.
2. Two tranches of FCCB conversion in the last 6 months indicates the confidence of the bond holders.
3. From a cash loss of around 9 crore in FY13; the company has done a cash profit of 46.99 CR in FY14 (check latest annual report)
4. In an interview to talkRA(in 2014), the CEO has indicated that Subex intends to become a USD 100 million revenue business with a operating margin of approx 25%; stock at current market cap is available very cheap.
NEGATIVES - POSSIBLE RISKS
1. Short term volatility(wild swings) in the stock price.
2. Inability of the marketing team to win as much new business as they anticipate.
INTERESTING INFO
1. The tagline of Subex2.0 as indicated in the latest AR is: Strong foundation, Sustainable growth; clearly indicates the top management confidence.
2. FY14 revenue break up: License & implementation(40%), Managed services(27%) and Support(33%)
3. Surjeet Singh, the current CEO of Subex was the CFO of Patni and played a significant role in its eventual buy out.
4. Even after the debacle the company experienced post its acquisition of Syndesis, the executive leadership, most notably, Vinod Kumar, Ashwin Chalapathy, Shankar Roddam, Ganesh and Sekharan stayed with the company.
MY TAKE
Subex is one of those rare successful indian software/IT product companies that developed original/patented products which have been adopted by large global clients across various countries. Subhash Menon, the founder and his core team truly deserve credit for this.
In the Subex1.0 version, the management did almost everything right in its first half, and then made a few mistakes(mainly wrongful/miscalculated acquisitions) in the second half. The stock price hit a life time high of 800 rs in 2007 and a life time low of 5 rs in 2013.
Now Subex2.0. The turnaround of this company has also been quite unique. The effort was admirably led by independent directors Sanjeev Aga and Anil Singhvi with full backing of the anchor investors(foreign) who held substantial stakes in the company. Selecting of Surjeet Singh as CEO was one of the masterstroke.
The most notable aspect in this entire journey is the loyalty and confidence of the 2nd level management of the company. Despite hardship and challenges, they stuck on with the company. Last but not the least, most of the clients stayed on with the company in spite of the uncertainity.
Depending on the magnitude of the turnaround, and successful implementation of strategy, this stock can go much much higher. Even by a conservative estimate, there is a potential of 400-500% profit from current levels.
A high potential multibagger!!
Disclosure: I own shares in Subex.
For personal advice and/or consultation; you can contact me via zorbayogi9@gmail.com
Important Note: Potential multibaggers are those stocks which have potential to give 200 - 1000% profits. Obviously such returns take time. Probably 2 - 3 years or more. Short term volatility is the reality of the stock market and that will always happen. Near term movements(upside and downside) are impossible to predict. Only invest funds that you will not need for the next 3 - 4 years. As long as you buy a stock for the right reasons and are convinced about the future prospects of the company, there is no need to worry if the share price goes down and stays down for a period of time after you buy; provided you have followed the cardinal stock market mantra BUY LOW AND SELL HIGH.
Very important note: The objective of this blog is to share knowledge and info about multibagger ideas/opportunities. Neither is this a trading website nor an analyst website nor a Buy/Sell call website. For stock market success, always do your home work, own analysis and make your own decisions.
NUMBERS - THE LATEST
Market cap: 190 crores CMP on Day15 Mar2015: Rs 11 BV: 11 rs.(approx)
Revenue FY14: 340 CR Net profit FY14: (11 cr)loss FV: 10
POSITIVES - MULTIBAGGER POTENTIAL
1. Subex is a turn-around story. Last 2 quarter results are clear indication that the company is turning around.
2. Two tranches of FCCB conversion in the last 6 months indicates the confidence of the bond holders.
3. From a cash loss of around 9 crore in FY13; the company has done a cash profit of 46.99 CR in FY14 (check latest annual report)
4. In an interview to talkRA(in 2014), the CEO has indicated that Subex intends to become a USD 100 million revenue business with a operating margin of approx 25%; stock at current market cap is available very cheap.
NEGATIVES - POSSIBLE RISKS
1. Short term volatility(wild swings) in the stock price.
2. Inability of the marketing team to win as much new business as they anticipate.
INTERESTING INFO
1. The tagline of Subex2.0 as indicated in the latest AR is: Strong foundation, Sustainable growth; clearly indicates the top management confidence.
2. FY14 revenue break up: License & implementation(40%), Managed services(27%) and Support(33%)
3. Surjeet Singh, the current CEO of Subex was the CFO of Patni and played a significant role in its eventual buy out.
4. Even after the debacle the company experienced post its acquisition of Syndesis, the executive leadership, most notably, Vinod Kumar, Ashwin Chalapathy, Shankar Roddam, Ganesh and Sekharan stayed with the company.
MY TAKE
Subex is one of those rare successful indian software/IT product companies that developed original/patented products which have been adopted by large global clients across various countries. Subhash Menon, the founder and his core team truly deserve credit for this.
In the Subex1.0 version, the management did almost everything right in its first half, and then made a few mistakes(mainly wrongful/miscalculated acquisitions) in the second half. The stock price hit a life time high of 800 rs in 2007 and a life time low of 5 rs in 2013.
Now Subex2.0. The turnaround of this company has also been quite unique. The effort was admirably led by independent directors Sanjeev Aga and Anil Singhvi with full backing of the anchor investors(foreign) who held substantial stakes in the company. Selecting of Surjeet Singh as CEO was one of the masterstroke.
The most notable aspect in this entire journey is the loyalty and confidence of the 2nd level management of the company. Despite hardship and challenges, they stuck on with the company. Last but not the least, most of the clients stayed on with the company in spite of the uncertainity.
Depending on the magnitude of the turnaround, and successful implementation of strategy, this stock can go much much higher. Even by a conservative estimate, there is a potential of 400-500% profit from current levels.
A high potential multibagger!!
Disclosure: I own shares in Subex.
For personal advice and/or consultation; you can contact me via zorbayogi9@gmail.com
Important Note: Potential multibaggers are those stocks which have potential to give 200 - 1000% profits. Obviously such returns take time. Probably 2 - 3 years or more. Short term volatility is the reality of the stock market and that will always happen. Near term movements(upside and downside) are impossible to predict. Only invest funds that you will not need for the next 3 - 4 years. As long as you buy a stock for the right reasons and are convinced about the future prospects of the company, there is no need to worry if the share price goes down and stays down for a period of time after you buy; provided you have followed the cardinal stock market mantra BUY LOW AND SELL HIGH.
Very important note: The objective of this blog is to share knowledge and info about multibagger ideas/opportunities. Neither is this a trading website nor an analyst website nor a Buy/Sell call website. For stock market success, always do your home work, own analysis and make your own decisions.
