Pentafour Software Attracts Attention
The share price of Chennai-based Pentafour Software and Exports Ltd has witnessed an upswing at the bourses recently. According to leading brokers, the activity in the stock has increased recently as it is considered as an undervalued stock.
At the National Stock Exchange (NSE), the scrip has moved up by Rs 37 from Rs 177 to Rs 214.
Daily trading volumes have also shot up from 13,100 shares to 2,62,000 shares.
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The scrip, which was traded at Rs 186 on the Bombay Stock Exchange (BSE) on February 13, has since then moved up by Rs 26 to close at Rs 212.
Trading volumes on the BSE have also risen from 16,900 shares to 1,24,000 shares last week .
According to a software analyst with a leading domestic broking outfit, the perception of the management of Pentafour had irked may institutional investors. This is said to have affected the investor confidence, the analyst said.
Foreign institutional investors (FIIs) were also wary of Pentafour Software due to its bad track record. It is learnt that Pentafour Product, which is a group company, had been a defaulter on repaying loans, said a source.
Analysts say that the Pentafour group has been making concerted efforts to change its image, particularly among FIIs who hold around 3 to 5 per cent stake in the company. They feel that the stock has attracted attention due to this holding by FIIs. The company has restructured its board of directors by introducing new independent directors.
Another key reason for the stock to witness hectic activity is also possibly on account of the scrip getting shifted to the forward group from February 23.
For the nine-month period ended December, 1997, the company recorded a net profit of Rs 49 crore. The profit reported was also higher by 5 per cent when compared with Rs 46.95 crore posted for the fiscal year 1996-1997. The earning per share of the company stand at Rs 48.
Expert revenue of Pentafour Software constitute 75 per cent with the majority of its exports to the US. The company currently has export orders worth $ 123 million which, apart from including Y2K projects, also include software development for the banking and insurance sectors.