TARGET ACHIEVED (78%)- SANKHYA INFOTECH LIMITED
DATE: 04/11/2017
  • COMPANY NAME : TARGET ACHIEVED (78%)- SANKHYA INFOTECH LIMITED
  • Description :

     Dear Readers,

     

    Today 05/12/2017 Sankhya touched 100 Rs and my given target achieved.

    Giving 78% return within 1 month.

    ____________________________________________________

     

    Dear Readers,

     

    Sankhya Info tech was recommended on 4th Nov'17 at 56 Rs for the target of 100 Rs.....Today 04/12/2017 stock has touched 96.45 nearby my given target 100 Rs..... and giving 73% return within 1 Months.

     

    Book Profit as my given target almost achieved.

     

    ========================

    Recommendation - Buy

    Hold for 2 years

    Target: 100 Rs.

     

    CMP: 56 Rs

    BSE Code: 532972

    NSE- NA

    Market Capital: 63.25 Cr.

    Face Value: 10

    52 Week Low / High: 20/69

    Book Value: 68 Rs

    Price/Book Value: 0.83

    Dividend (%): o

    Promoter Share Pledge – Nil

    TTM EPS – 4.46

    P/E – 12.61

     

    Part – 1 Company background:

    • Sankhya Infotech Ltd., incorporated in the year 1997 having a market cap of Rs 63.25 Crore and operating in Information Technology sector.
    • Sankhya is having global name in the field of simulation and training (CBT/WBT).
    • Sankhya was the first company in the world to have launched the web-based simulation for the Aviation Industry - and was appreciated by the US Federal Aviation Administration.
    • Sankhya has a unique distinction of offering the complete range of technology-based solutions for eLearning, simulation, and training management system that includes learning management and online assessment systems.
    • Sankhya has developed over 20 different types of defense simulators for defence sector training.
    • Sankhya has strong aerospace, defense focus, and caters to energy, BFSI, medical and manufacturing domains serving Fortune 500 customers (such as Airbus, Boeing, Emirates Airlines, Etihad Airways, Embraer) in over 50 locations, spread in four continents.
    • Sankhay is providing training solutions to the Indian Army and Indian Navy.
    • The company’s training technology is being used by every airframe manufacturer in the world, large defense organizations, ultra large energy companies, medical companies and over 53% of all Bank employees in India use the company’s solutions.
    • Sankhya offers three categories of Simulation solutions like desktop based simulation solutions, full motion platform based training simulations, Immersive VR simulations.
    • In 2012, Sankhya Infotech had developed Missile Simulator for Indian Army.The Union Finance Minister, Shri Pranab Mukherjee had launched the “Gyanodaya” e-Learning Portal of SBI , developed by Sankhya Infotech.
    • In 2013, Central Board of Secondary Education had Empanelled Sankhya for Comprehensive Online (and offline) Learning Management System For Continuous and Comprehensive Evaluation (CCE).

     

    Part – 2 Company Group and Subsidiary:

    • Sankhya Information Technologies (India) Pvt.Ltd.
    • India Sankhya Sarl - France
    • Sankhya USA Corporation - USA

     

    Part – 3 Products:

    1. Silicon Suite:

                   TMIS – Training Management Information System:

    SILICON TMIS is an enterprise wide system that provides a basic backbone for managing and automating all aspects of training. It is developed using Carnegie Mellon University's best design and development practice and patented resource optimization algorithm.

    With SILICON™ TMIS provides facility of Curriculum Management ,Records, Planning and Scheduling , Grading and Assessment, System configuration ,Reports, System security and Access,User Interface

                  LMS – Learning Management System:

    It is a feature-rich learning management tool combining both synchronous and asynchronous learning methods. It helps combine best-of-breed functionality with simple configuration to help easily administer a variety of learning activities for both internal and external audiences

    Conformant to industry standards such as SCORM and AICC, and built on a flexible architecture, customization can be carried out with ease to suit exact training needs.

                 LCMS – Learning Content Management System:

    SILICON™ LCMS is a feature rich Learning Content Management System to design, develop and maintain eLearning course content. Part of the SILICON suite, SILICON LCMS enables you to capture, consolidate, organize, and reuse dynamic learning content employed by enterprises.

     

    1. IRMAO – Developed for Airline operations

    IRMAO is an integrated resource planning, management tracking system exclusively developed for Airline operations. It is an end-to-end solution for all Flight Operations.

    Covers the entire spectrum of operations such as Crew Management, Roster Management, Training Management, Preferential Bidding, Auto Leave and Medical, Crew Kiosk and Disruption Management

     

    1. Sakai CLE (Collaborative learning environment)

    Sakai CLE (Collaborative Learning Environment) is a widely used and popular open source LMS used in many leading educational institutions and corporate. It provides a range of features under four major categories such as Course Management, Assessment and Grade Book, Collaboration, Enterprise Integration and Scalability. It is distributed under Educational Community License.

    Sankhya has partnership with r-Smart, a commercial affiliate of Sakai Core Foundation for Tier 2 & 3 support including update and maintenance releases.

     

    Part – 4 Services:

    • Customer Courseware
    • Virtual Maintenance Trainers
    • Simulations Solutions
    • Technical Documentations
    • Consulting
    • Off-shore development
    • Facility Management Services
    • Decision Support Systems

     

    Part-5 Verticals:

     

    Aero Space:

    • Training solutions for many leading aerospace companies and aviation schools.
    • All Sankhya products and training solutions are complaint to industry standards such as AICC and SCORM.
    • The range of services that offer include

    Training Management Information System (TMIS)

    Learning Management System (LMS)

    Learning Content Management System (LCMS)

    Online Examination/Assessment System

    Virtual Maintenance Trainer

    Desktop Simulation

    Customised CBT/WBT

    Consultancy Services

     

    Defence:

    • Supply of advanced training platform and services for the defense forces since its inception.
    • Today, Sankhya serves all the three services of Indian Defense (Army, Airforce and Navy).
    • Sankhya's has also partnered with major Defense PSU and Defense Labs to provide cutting edge virtual training and simulation solutions to Indian Defense forces.
    • Company is having commitment to defense training with a major American defense contractor selecting sankhya’s training platform for integration with their training system.
    • The range of services that offer include
    • Training Management Information System (Defense version)
    • Simulators

    Driving Simulators

    Heavy Vehicle Simulators

    Advanced Weapon Simulators

    Tank Simulator

    Electronic Warfare Simulator

    Maintenance Simulator

    • Learning Management System (LMS)
    • Online Examination/Assessment System
    • Virtual Maintenance Trainer
    • Customized CBT/WBTT
    • Consultancy Services

     

    BFSI (Banking Financial Service & insurance):

    • Training to banking staffs.
    • The range of services that include

    Learning Management System (LMS)

    Learning Content Management System (LCMS)

    Online Examination/Assessment System

    Customized Content Development (Multimedia CBT/WBT/ILT)

    e-Learning consultancy

    Simulation and Game based Learning

     

     

    Transportation:

    • Providing training to transportation industry (sea, rail and road).
    • The range of services that include

    Driving Simulators

    Maintenance Simulators

    Desktop Simulators

    Virtual Maintenance Trainers

    Training Management System

    Learning Management System

    Online examination/Assessment System

    Customized Content Development (Multimedia CBT/WBT/ILT)

     

    Energy:

    • Power plants require highly skilled people to work on sophisticated equipments and complicated processes. Engineers, technicians, and control operators need to be trained to become familiar with unpredictable situations while adhering to safety measures and avoiding the risk of damage.
    • With a powerful simulated virtual environment, operators can train and accredit their personnel on standard, incidental and accidental operations for compliance with Safety and Regulation
    • Simulation also enables rapid initiation to the overall function at a very reduced training cost.
    • The range of services that include

    Training Management Information system (TMIS)

    Learning Management System (LMS)

    Online Examination/Assessment System

    Customized Content Development (Multimedia CBT/WBT/ILT)

    e-Learning consultancy

    Simulation and Game based Learning

     

    Higher education

    • We provide our customers with a powerful learning portal designed exclusively for training institutions and installed in more than 100 universities and institutes across the globe. Our custom built, educational content are immersive and designed based on international standards and the best of pedagogical practices.
    • We provide skill based learning solutions that induce practical training based on industry best practices.
    • The range of services that include

    Learning Management System (LMS)

    Customized Content Development (Multimedia CBT/WBT/ILT)

    Online examination system

    Content Management System

     

     

    Part – 6 Customers:

     

     

     

    Part – 7 Sankhya Infotech Ltd - Shareholding Pattern:

     

    Share holding Pattern

    Description

    Percent of Share (%)

    Promoters & Promoters Group

    24.19

    Public Holding

    75.81

    Total

    100

     

    Part – 8 Financial Focus:

     

    Focus on - Financial Results March 2017:

     

    • The total revenue of Shankhya for FY 2017 increased by 5.6 % from Rs, 1529.38 mn in FY 2016 to Rs, 1616 mn.

    • PBDT grew by 17.58 % from Rs, 108.61 mn in FY 2016 to Rs, 127.71 mn in FY 2017.

    • Net profit after tax grew by 19.9 % from Rs,39.71 mn in FY 2016 to Rs,47.62 mn in FY 2017

     

    Focus on - Financial Results Q1FY18 YOY Basis:

     

    • Q1 FY18 Total Revenues increased by 5% YoY from Rs. 414.13 mn to Rs. 435.15 mn.

    • Q1 FY18 PBDT increased by 30.8% YoY from Rs. 30.19 mn to Rs. 39.49 mn.

    • Q1 FY18 PAT increased by 19.5% from Rs. 12.97 mn to Rs.15.5 mn.

     

     

    Investment Rational:

     

        • Robust 24% growth in revenue 5 year CAGR
        • Strong global player by selling its product to the American Defense Industry
        • The country’s extensive modernization plans with an increased focus on homeland security and India’s growing attractiveness as a defence sourcing hub which will create scope for Sankhya.
        • Provides comprehensive cutting edge technology based training solution to its customers in diverse sectors
        • Proven reliability of products at several reputed clients to pursue Business to Consumer (B2C) market.
        • Target to expand footprint in the Business-to-Business (B2B) model.
        • Sankhya has strong Aerospace & Defense focus
        • Globally, self-paced training and education has become the key to success of any industry. To address the four goals of improving competency, rapid scalability, reducing cost and improving compliance, industry has adapted eLearning and other training and simulation solutions which make growth in company top & bottom line
        • Market size of self-paced learning is US $ 56 billion, and is seeing 23.5% CAGR.
        • Market size of modeling and simulation industry is US $ 9.6 billion and it is moving at a 29% CAGR.
        • The military simulation market will continue to be led by the US and major European states, however, their position as leading national markets will be challenged by emerging powers in the Middle East and Asia in the years to come.
        • Company is at a stage to launch two technological breakthroughs that would herald a new dimension in the way professional training is imparted and company strongly believe that company ride on the strong surge of Internet of Things.
        • Till now, the company provided Analytics and AI through its software products, now the company is seeing the immense scope in providing services in Analytics and AI in a big way
        • The company has three business models under the B2B Category, they are Product license, Master Services Agreement, and Annual maintenance services. Master Services Agreement contributes to 70% followed by 20% in product license and 10% in Annual maintenance services of overall business.
        • Over 41.7% of global Fortune 500 companies now use some form of educational technology to instruct employees during formal learning hours, and that figure is only going to steadily increase in future years.
        • Scope for unveiled in the area of Analytics and Artificial Intelligence based immersive simulation technology.
        • The company’s training technology is being used by every airframe manufacturer in the world, large defense organizations, ultra large energy companies, medical companies and over 53% of all Bank employees in India use the company’s solutions.
        • Company is expecting better growth in terms of revenue & EBITDA margins to improve to at least 15% to 17% by FY18.
        • Company has an excellent order book and has renewed contracts with all the major customers. Company projects that it would be able to return to good profitability and with steady growth.

     

    Recommendation:

     

    • Stock CMP is 56 Rs. and stock is trading at P/E 12.61 which is below the Industry P/E 18.93 & TTM EPS 4.46, based on all above investment points, stock may touch 100 Rs. within 2 years’ time horizon.

     

     

     

    Please note:

     

    • Note: The articles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

      Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

      Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments.

     

     

     

     

Lights