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Wednesday, 3 October, 2007

Aftek Ltd.: Am I Missing Something

Aftek Ltd.

Company Website: Aftek Ltd.
Company Details: Google Finance on Aftek Ltd., Kotak Securities on Aftek Ltd
Annual Report: Aftek Ltd. Annual Report 2006, Aftek Ltd. Annual Report 2005

I am not comfortable with the kind of business they are in. Also I am not very sure of the products they make. They sound complex and it is a business that keeps changing. Also the company has an uncharged amount around 17 crores against foreign exchange that is essentially a reduction of 17 crores.

Consider the market cap (857 lac shares * 73rs = 625 crores), cash flows the company is generating (they claim in excess of 300 crores as cash and cash equivalent) and reported profit after tax around 100 crores. The company is not very heavily loaded as far as debt is concerned (aroud 50 odd crores).

Is this some kind of a scam or is all this true. Add to this a subsidiary (25% holding I think) which is currently valued at 600 crores (25% stake was purchased in lieu of knowledge transfer). The company exists for sure as I had once appeared for an interview for a job oppurtunity with the company (don't ask what was the result).

And the chairman starts his speech with a line from "Sound of Music"

Lets start from the very begining
a very good place to start


ANY COMMENTS, whoever has read this far ...?

7 comments:

Anonymous said...

No much I heard recently i think it was in news for Goldman Sachs Investments Mauritius has acquired 20 lakh shares or a 2.29 per cent in the company to raise its stake to 5.74 per cent.


Regards,
yash

Anonymous said...

I think Aftek is doing well now. With the stake in Seekport it will progress quiet steadily thats on big reason of Goldman Sachs Investments Mauritius to acquire the stake in Aftek. The company has good future. The share price should be rising too.

S4ur4bh said...

Thanks for the comments guys, but please please leave your email addresses :)

rohit said...

i am not comfortable with the management. there is a lot of conflict of interest. i read through their AR and decided to avoid the stock. you can see the analyis on my blog
regards
rohit

Anonymous said...

Hey check this out:

Its book value per share is 55;
Free reserves per share is 55.

For an operating margin of 37% PE is only 6.61.

WOrrying statistsics is that if it is truly undervalued, why arent the owners increasing their stake from 11%. I mean the free reserves can be used for this.

If their OPM is 37% why are they not leveraging themselves? Possibly no new projects expected?

And why the hell are they not paying taxes????? 107.29 operating profit, interestes nil, depreciation 14.38 and taxes paid 1.3. In India there might be a tax heaven, but what of their subsidiary. Infy pays 7% taxes, they only .9. I feel this low as they make actual stuff WiFi enabled phones and all that, so there should be customs, excise, import duties.......

And their annual report, why is that not not yet come out?

Yours,
Piddhi Piddhi Oh yeah oh yeah

Anonymous said...

Well Aftek been a no debt company which is interesting. and with foreign investment it show signs of progress. as the last trading price was 71.

QUALITY STOCKS BELOW FIVE DOLLARS said...

interesting.