FIRSTSOURCE SOLUTIONS MULTIBAGGER POTENTIAL STOCK D28M02Y2014

Firstsource Solutions is a leading BPO company. Its focus areas are healthcare, telecommunications, Media, Banking and financial services. The company has over 100 clients, across various geographies. These include 21 Fortune500 and 9 FTSE100 companies. For more info check, http://www.firstsource.com

PRESENT DAY NUMBERS
CMP on Day28 Feb2014: Rs 28.25            Market cap: 1822 crores              BV: 26            FV: 10
Consol revenue FY13: 2818 cr (FY12 2255 cr)                   Net profit: 146 cr (FY12 62 cr)                                                                                                                   EPS: 2.82 (FY12: 1.44)
Cons revenue 9MFY14: 2320 cr            NP 9MFY14: 143 cr                       EPS: 2.04 (9MFY14)
Debt: 756 cr (long term)                      Cash on books: 149 cr

BRIEF HISTORY
Originally established in 2001 as 'ICICI infotech' by ICICI bank. Change of name to 'ICICI Onesource' in 2002. Name changed again, to 'Firstsource solutions Ltd' in 2006. Listed on indian stock exchange in the year 2007.

MULTIBAGGER POTENTIAL

Company on a growth track:
1. Consistent growth in revenues during last 8 quarters, despite a subdued global environment.
                    Cons revenue Q3 FY2014: 799 cr [Q3 FY2013: 719 cr, Q3 FY2012: 581 cr]   
2. Consistent improvement in business performance over last 8 quarters, thereby improving profitability.
                    Net profit Q3 FY2014: 48 cr [Q3 FY2013: 41 cr, Q3 FY2012: 7 cr]
Inflection points:
1. Rajesh Subramaniam re-joins the company as deputy MD and CFO in July 2011, and is further elevated to MD and CEO in April 2012
2. Sanjeev Goenka acquires 49.5% in Firstsource, and becomes its new owner in October 2012; and as part of the deal structuring, the company pays off the FCCB bond holders.

INTERESTING INFO
1. In his earlier stint, Rajesh Subramaniam had been the CFO of Firstsource from November 2002 to June 2008.
2. Ace investor Rakesh Jhunjhunwala, buys 2.5 cr shares(around 5%) in Firstsource, in July 2013.

MY TAKE
Though Firstsource is technically a midcap stock (<1850 cr market cap); the reality is a little different. It is a large company that employs around 30,000 people, operates 47 delivery locations across 5 countries(India, US, UK, Philippines and Sri Lanka), manages approx 90% repeat business from existing clients , with annual revenues of over 3000 cr. Ideal combination of an astute promoter and an experienced and competent management team. This belongs to the Buffett philosophy category of "Great business at a reasonable price".
 
A robust potential multibagger!!

Disclosure: Firstsource solutions is part of my core holdings (and I intend to add more)
    

ONMOBILE GLOBAL MULTIBAGGER POTENTIAL STOCK D16M02Y2014

Onmobile Global is an MVAS(mobile value addedd services) company based in Bangalore. Renowned for its hugely successful RBT(ring back tones); the company now offers 5 product categories; Music, Expression, Entertainment, Cloud and Life impacting services. For more info check, http://www.onmobile.com/

Mobile VAS is broadly defined as all those products and services offered by a cellular/mobile operator other than voice(ability to speak) and SMS(ability to text). VAS includes ring tones, music, gaming, entertainment, mobile browsing, and further extends to m-commerce, m-education and a gamut of areas.

PRESENT DAY NUMBERS
CMP on Day16 Feb2014: Rs 32         Market cap: 366 crores            BV: 79            FV: 10
Debt: 130 cr                                  Net worth: 722 cr (excl goodwill)      Cash on books: 212 cr

BRIEF HISTORY
The company was originally incubated within Infosys, later spun off, and incorporated in California in the year 2000.  Acquired Voxmobili, a French data products company in 2007. First indian mobile VAS company to go public in the price band of 425 - 450. Listed in Feb 2008; opens at issue price of 440. Acquired Telisma S.A., a French speech recognition company in 2008. Acquired the leading 3G video technology and mobile solutions developed by Silicon valley based Dilithium networks Inc in 2010. Acquired Livewire Mobile; a music, ringtone and infotainment company in 2013; thereby expanding its services to leading operators in North America.

MULTIBAGGER POTENTIAL

Potential of MVAS:
There are numerous reports about the potential of MVAS in India and across geographies. Some also mention business potential. Most of these numbers are humongous. I have deliberately not included data from those reports. How ever, voice and SMS are just parts of the mobile telephony business. We have all witnessed how majestic the growth has been in that space. As MVAS includes a much wider gamut of products and services, one only needs to wait and watch as to how large this opportunity could become.
Onmobile Global is well positioned to make the most of this opportunity. It has all the basics in place. After the recent turbulence, the company has emerged with a more robust foundation. So, has the potential to capitalize on this opportunity.

Revenue diversification over last 4 years:
Annual revenue, and mix in Q2 FY2010: 106 cr [India 79 cr, International 27 cr]    
Revenue, and mix in Q2 FY2014: 225 cr [India 50 cr, Latam 55 cr, Dev mkts 80 cr, Emrg mkts 38]
                    (Except India, all geographies are growing since last 8 quarters.
                                           International business share at 76% in Q2FY14)

Current global representation:
In the year 2009, the company had presence/offices in Australia, Bangladesh, France, Indonesia, Malaysia, Singapore, Nepal, South Africa and Romania.
In 2013, Onmobile has added the following countries: Netherlands, USA, Mexico, Argentina, Venezuela, Brasil, Egypt, Uruguay, Senegal, Mali, Kenya, Malawi, Costa Rica, Spain, Tanzania, Zambia, Uganda, Madagascar, Rwanda, Nigeria, Ghana, Sierra Leone, Canada, Italy, Spain, Cyprus, Guatemala, Chile, Panama, Nicaragua, El Salvador, Peru.

The increase in the international spread of geography during last 4 years, in conjunction with the increase in annual revenues, and change in the revenue mix speaks volumes about the future potential of this company.

IMPORTANT INFO
1. Sanjay Bhambri, the current Chief commercial officer, re-joined the company as Regional VP, Emerging markets. In his earlier stint with Onmobile, he was VP, APAC and MEA.
2. Onmobile has inducted 2 new independent directors into the board within the last 1 year. Both people with impecabble credentials who earlier held positions of repute in their respective countries. Mr R Chandrashekhar, who was Chairman, Telecom commission and Secretary, DoT. Ambassador (Ret.) Barry White, who was US ambassador to Norway.

MY TAKE
The last 3 years have been terrible for the company. Corporate governance issues, unfavorable regulations by the Indian telecom authority, declines in India revenue, dubious actions by ex-CEO, senior management resignations, telecom scams in India. Everything that could have gone wrong went wrong. The once poster-boy of indian mobile VAS became its whipping-boy. Share price collapsed from a high of 340 rs in July 2009 to a low of 19 rs in Aug 2013.

As the oracle of Omaha says,
                            "Buy when others are fearful, and Sell when others are greedy"

In the last 6 quarters, the company has systematically grown the business across multiple geographies; Latin America, Africa, North America, Europe (while holding their fort in India). They have further set right systems and processes, strengthened the corporate governance, brought back some of the erstwhile stars, strengthened their top management, organized their service offerings and pain stakingly brought the company back on rails.  

With the foundation in place, fully energized by the revamp and re-organization, Onmobile Global is equipped and well placed to become a top global MVAS company. Further the recent corporate action, whereby the promoters have come up with an open offer at 40 rs, to increase their stake from 32% to 42% is a testimony of their confidence in the future prospects of the company.

A strong potential multibagger!!

Disclosure: I own shares in Onmobile Global (and intend to add more)

MARKSANS PHARMA MULTIBAGGER POTENTIAL STOCK D09M02Y2014

Marksans pharma is a promising company with presence across multiple countries in various geographies. Manufacturing facilities are at Goa, India and Southport, UK. Focus areas include Oncology, Gastroenterology, Antidiabetic, Antibiotics, Cardiovascular, Pain Management, Gynaecology. For more info check, http://www.marksanspharma.com

The company has 3 overseas subsidiaries; Bell, Sons & Co (in UK), Nova pharma Australasia (in Australia) and Relonchem Lts (in UK).

PRESENT DAY NUMBERS
CMP on Day9 Feb2014: Rs 17.50                    Market cap: 674 crores                       FV: 1
Cons revenue FY13: 438 cr (FY12 355 cr)         Net profit: 45 cr [FY12 (17) cr]             EPS: 1.19
Cons revenue 9MFY14: 471 cr                         NP 9MFY14: 62 cr                 9MFY14 EPS: 1.59
Debt: 85 cr

BRIEF HISTORY

Originally incorporated in 2001 as a wholly owned subsidiary of Glenmark Pharmaceuticals. Later spun off into a separate entity, Glenmark Laboratories Ltd. Name changed to “Marksans Pharma Ltd” in 2005. The company has world class manufacturing facilities for API and Formulations, approved by US FDA, UK MHRA, Australia TGA and Brazilian ANVISA health authorities.

Subsequently the company underwent a series of mishaps and challenges, like bad takeover/mergers, default of FCCB/loans, declining revenues, business downslide, etc; resulting in completely eroding the net worth. The company had to register to BIFR under sick companies Act. The stock market had written off the company and the share prices languished for years.

MULTIBAGGER POTENTIAL

Turnaround details and Inflection points:
1. The company allotted 17,500,000 equity shares to the chief promoter, Mr. Mark Saldanha, thereby increasing the equity share capital in December 2012
2. Marksans entered into a settlement agreement with the holders of FCCB for settling USD 26 million worth in principal value in March 2013
3. De-registered from the purview of SICA and no longer in BIFR as per hearing held in July 2013
4. Turned profitable with consolidated net profits of 45 cr in FY2013

Company on a growth track:
1. Consistent business and financial performance since last 6 quarters
2. Cons revenue Q3FY14 is 168 cr vs 114 cr in Q3FY13 (growth of around 47%) 
3. Cons NP Q3FY14 is 22 cr vs 8 cr in Q3FY13 (improvement of around 175%)
4. The company has one of the biggest manufacturing facility in India having USFDA approval for softgel products.  Products based on soft gelatine are high in demand

INTERESTING INFO
1. Mr. Mark Saldanha, promoter and MD of Marksans, is the brother of Mr Glenn Saldanha, the chairman & MD of Glenmark pharmaceuticals
2. Between January and April 2013, Mark purchased the company stock from open markets and increased his stake to 51.25%

MY TAKE
Marksans is a fantastic turnaround story. Promoter with excellent credentials, competent top management, good mix of products and representation in various geographies. Company also focused on drugs going off patent between 2013 and 2018. Has capability to leverage such opportunities. Deeply undervalued and beaten down stock. A strong potential multibagger. 

Disclosure: Marksans pharma is a part of my core holdings

                                    

TRIGYN TECH MULTIBAGGER POTENTIAL STOCK D02M02Y2014

Trigyn Technologies is a 1000 people IT company with offices in USA (Washington DC, New Jersey, Massachusetts), Germany and Switzerland. Development centers in Mumbai and Bangalore. Focused on IT Staffing, Solutions, Systems Integration, Software Development and Maintenance, and other services. For more info check, http://www.trigyn.com

PRESENT DAY NUMBERS
CMP on Day2 Feb2014: Rs 22.55             Market cap: 66 crores             BV: 34                FV: 10
Cons revenue FY13: 351 cr (FY12 279 cr)       Net profit FY13: 15 cr (FY12 10 cr)         EPS: 5.33
Cons revenue H1FY14: 215 cr                        NP H1FY14: 15 cr                      EPS H1FY14: 5.2
Debt: Zero                                              Cash on books: 7.5 cr

BRIEF HISTORY
Originally incorporated in 1986 as "Leading Edge Systems Ltd". IPO in year 1995 at Rs 50 per share. Bonus issue of 1:1 in year 1998. Name changed to "Trigyn Technologies Ltd" in year 2000.

MULTIBAGGER POTENTIAL
Approx P/E: 2.5
Approx Cons revenue FY14: 400 cr              Approx NP FY14: 30 cr               Approx EPS: 10

Company on a growth track:
1. Consistent business performance (check company website for assignments bagged in 2013)
2. Consistent growth in financials for last 20 quarters
                        (FY08 cons revenues 119 cr, NP 7 cr; FY13 cons revenues 348 cr, NP 15 cr)
3. Achieves 150% increase in net profit on consolidated basis for Q ended June 30, year 2013
4. Recruiting technical staff aggressively in 2013 and 2014 (check the various job sites)

Inflection (turning) points:
1. Mr Homiyar Panday designated as President of US operations in May 2003
2. United Telecoms acquires the company in July 2006
3. Mr R Ganapathi appointed as Chairman and Executive director in April 2012
4. Extension of UN contract in August 2013

INTERESTING INFO
1. Some time in the year 2000, the share price of Trigyn was Rs.3000
2. Stock price of the company 6.50 in APR2013 and 26 in JAN2014
                        (already a multibagger(4-bagger) stock for people who bought in April 2013)

MY TAKE

Trigyn is a turnaround story on a stable footing. Experienced promoters, competent management, consistent performance and steady growth. Mostly ignored, deeply undervalued,  under researched company with robust fundamentals. US and Europe recovery, weak currency, IT sector bullishness are positives for the company. A strong potential multibagger. 

Disclosure: Trigyn tech is part of my core holdings (and I intend to add more)