Shares of Security Intelligence Services (SIS) vaulted 9 per cent to Rs 465 on the BSE in Tuesday's intra-day session after the company on Monday, post market hours, announced a share buyback offer worth Rs 100 crore.
The company in an exchange filing on February 15, 2021, said that it would buyback 18,18,181 equity shares, representing 1.24 per cent of the total paid-up equity capital as on March 31, 2020. READ MORE
The firm has set the buyback price at Rs 550 per share which is 29 per cent higher than its previous close of Rs 426.15.
The Board of Directors noted the intention of the promoters and members of the promoter group of the company to participate in the proposed buyback.
As of February 12, the promoter and promoter groups held 73.10 per cent of the total equity capital followed by foreign institutional investors that held 14.43 per cent stake and mutual funds that owned 6.57 per cent stake. A total of 5.90 per cent equity is held by others.
The company on February 3, 2021, announced a 26.5 per cent year-on-year (YoY) jump in net profit to Rs 99.02 crore for the quarter ended December 2020. The sales, meanwhile, rose 8.2 per cent YoY Rs 2,357.51 crore.
"It reported cash flow conversion of 145 per cent for 3QFY21. The strong cash flow generation has helped SIS reduce its debt significantly," said analysts at Motilal Oswal Financial Services, adding that over the medium term, as both the centre and state governments look forward to liberalising and formalising labour markets, SIS should be among the biggest direct beneficiaries.
The brokerage has a 'BUY' rating on the stock with a target price of Rs 620 per share, implying an upside of over 30 per cent from current market levels.
At 10.57 am, the shares of the firm were trading 4.07 per cent higher at Rs 443.50 per share while the BSE barometer Sensex was up 0.39 per cent at Rs 52,357.
SIS is a market leader in security, facility management & cash logistics solutions with operations across India, Australia, Singapore and New Zealand.