Stock of this digital transformation solutions provider soars 33% in 2 days

Shares of Saksoft hit a fresh record high of Rs 244.70, as they soared 17 per cent on the BSE in Wednesday’s intra-day trade amid heavy volumes. In past two days, the stock has zoomed 33 per cent from a level of Rs 183.80. In comparison, the S&P BSE Sensex was up 0.06 per cent at 60,165 at 11:35 AM.

The average trading volumes at the counter more-than-doubled today. A combined 3.95 million equity shares representing 3.7 per cent of total equity of Saksoft so far changed hands on the NSE and BSE.

Thus far in the current calendar year 2023, the stock price of Saksoft has nearly-doubled or zoomed 99 per cent, as compared to 2 per cent decline in the S&P BSE Sensex.

Saksoft is a leading digital transformation solution partner for Fintech, Transportation & Logistics, Telecom & Utilities, Retail Ecommerce and Health care customers worldwide. The company is engaged in providing business intelligence and information management solutions predominantly to mid-tier companies based out of USA and UK.

Saksoft initially catered to the Banking, Financial Services, Insurance (BFSI) segment before diversifying to ecommerce, manufacturing, public sector and education verticals. The company now offers associated services like application development, testing and quality control and solutions based on cloud, mobility and Internet of Things (IoT) along with Information Management (IM) and Business Intelligence (BI) solutions.

For the first nine months (April to December) of financial year 2022-23 (9MFY23), Saksoft had reported 41.7 per cent year-on-year (YoY) growth in its revenue to Rs 483.55 crore and 24.7 per cent YoY jump in profit after tax at Rs 56.99 crore.

The company’s 9 months revenue for FY22-23 surpassed full year revenue of the previous financial year. The company registered highest-ever quarterly revenue at Rs 171.68 crore during December quarter (Q3FY23), with a growth of 37.9 per cent YoY and 4.8 per cent quarter-on-quarter (QoQ) basis. It maintained a double-digit EBITDA margin at 16.0 per cent in Q3FY23, despite of challenging global macro-economic environment.

The company issued guidance for the first time in its prospects. Based on the robustness of order flow and increase in spending within the verticals of the company’s presence, the company announced a revenue guidance of $100 million by 2025.

The company in its FY22 annual report said that it will continue to build enterprise applications for port operators and ship management companies. The company will aid public sector agencies to transform digitally and upload their data on commercial cloud (as per the government mandate).

The driver of long-term growth for industry is the structural shift within the technology market, leading to growing primacy of IT services. Robotics, artificial intelligence, cybersecurity, Internet of Things (IoT), among others is expected to be the key technology focus areas in the medium term. While the IT spending forecasts remain positive, a slowdown in the US and UK economy would impact the IT spending of the clients in these geographies. The company’s ability to add and diversify its customer base while maintaining stable margins remains key to the prospects of the company, according to CARE Ratings.