Sasken Communication was a sizzling stock in Indian bourses for a long
time.Once it termed as one of the most promising mid size IT company from India
.In 2007 its share price touched a high of even Rs.624. which later plunged to
Rs.40 level in 2009.Sure, it is not without any reason. Sasken is a communication software company with
considerable presence in the broadband and wireless software space. Its core
expertise lies in developing embedded communication software for companies
across the communication value chain-network equipment manufacturers,
semiconductor vendors and mobile terminal vendors.Sasken is also present in application
software development for communication service providers.Many once well known
companies like Nortel, Nokia, Motorola
..etc were the prime customers of Sasken.Sasken's strategy to depend on very few
customers for its revenue growth came as
a big blow on the company when Nortel filed for
bankruptcy protection in 2009.Nortel was the largest customer and a
minority share holder of Sasken. The change of equations in telecom sector also
affected the growth of sasken in recent years.In the past five years company
reported continuous fall in revenue and exit of some high profile executives
from the company.After a long gap promoters are now taking some proactive steps
to prevent further fall and bring back growth.Sasken is now planning to
diversify into more new areas and more customers to de-risk by avoiding the earler situation
of depending only on handful customers.
The most important decision by the management is to induct more professionals in the company.Recently ,its founder CEO Rajiv Mody resigned from the post and appointed Mr Anjan Lahiri as the CEO.Mody will continue as the CMD of the company.Mr.Anjan Lahiri is a well known figure as the CEO of MindTree Ltd’s information technology business.Only recently he quit Mind Tree and in last week joined in Sasken as Whole time Director and Chief Executive Officer. Anjan is one of the 10 professionals from Wipro and Cambridge Technology Partners who came together to start Mindtree in 1999, and also known as the main piller who stabilised the business of Mindtree post departure of Ashok Soota in 2011.He is also known as one of the best Sales guy in IT Industry .Sasken is expected to gain from the experience and expertise of Anjan at a time when the company desperately needs a lifeline.
The most important decision by the management is to induct more professionals in the company.Recently ,its founder CEO Rajiv Mody resigned from the post and appointed Mr Anjan Lahiri as the CEO.Mody will continue as the CMD of the company.Mr.Anjan Lahiri is a well known figure as the CEO of MindTree Ltd’s information technology business.Only recently he quit Mind Tree and in last week joined in Sasken as Whole time Director and Chief Executive Officer. Anjan is one of the 10 professionals from Wipro and Cambridge Technology Partners who came together to start Mindtree in 1999, and also known as the main piller who stabilised the business of Mindtree post departure of Ashok Soota in 2011.He is also known as one of the best Sales guy in IT Industry .Sasken is expected to gain from the experience and expertise of Anjan at a time when the company desperately needs a lifeline.
On the financial side ,Sasken reported
a turnover of Rs.475 Cr ,net profit of Rs.32 Cr, and an EPS of Rs.13 in
FY 2012-2013.In the latest quarter, Company reported some improvement in its top line and bottom
line compared with March quarter. June qtr sales were Rs.115 Cr and net profit
is Rs.17 Cr and qtr EPS is Rs.8 .Company is continuously paying hefty dividend
.In last two years company distributed 70% each and in this FY, already
declared an interim dividend of 45%. In the past few days promoters started
purchasing shares from open market which is another positive sign.
I believe ,promoters are now taking some serious efforts to bring back the company into the
right track and the result of such efforts will start to reflect in coming
years.Those with some risk appetite can take limited exposure in Sasken at CMP
of Rs.118 with a long term view.
Link to company website HERE
Link to latest AR HERE
