Stock To Trade

GLODYNE TECHNOSERVE
Present Price – Rs.456, Buy Only Above – Rs.463, Projected price – Rs.487/510

Glodyne Technoserve is one of the few domestic focused IT players with core competency in Application software services and Technology IMS (Infrastructure Management Services). The company derives about 80% of its revenue from technology infrastructure management services (IMS), and rest comes from application development & other services. The company operates in India (75% of rev.) & USA (25% of rev.) geographies. Glodyne expects strong growth prospects for its Tech IMS space for next few years, together with strong traction seen in subsidiaries ensures strong growth visibility for FY12E and FY13E. As per various studies, while in general offshoring services have grown rapidly in past one decade, the services pertaining to remote management and maintenance of core IT infrastructure has been rather slow to gain popularity. As of now, only about 7 percent of the addressable market is being estimated to have been captured. Studies by Mckinsey have suggested that shifts in customer attitudes and economics could trigger rapid growth for these services.

The company presently has over 200 clients spread across India and USA. Approximately 75% of the clients are located in India. Top 20 clients contributes about 37% to the company’s topline.. As per the management, over 90% of the company’s business comes from renewal contracts. In India, the company operates over 100 service support centers with 10 sales and marketing offices spread over all regions. The government departments and public sector enterprises comprise the largest client segment. On the technical front, the stock will witness a strong breakout once it is able to cross the level of Rs.463. Buying is advised above this level for a target of Rs.487 and Rs.510. The time frame of the trade would be around 15-20 trading sessions.