Recommendation - Buy between 78 to 65 Rs
Tgt - 150 Rs
Hold - 2 Years
- CMP: 74 Rs
- BSE Code: 533676
- NSE- INDOTHAI
- Market Capital: 74.5 Cr.
- Face Value: 10
- 52 Week Low / High: 19.8/128.5
- Book Value: 46.8
- Price/Book Value: 1.58
- Promoter Share Pledge – Nil
- TTM EPS – 13.78
- P/E – 5.38
Part – 1 Company’s Information:
- Indo Thai Securities Limited is the flagship company of 'Indo Thai' group, which has its Registered Office at Indore.
- Company has been offering services to corporate clients, high net worth individuals and retail investors since 1995
- Indo Thai is a group of 14 Companies including two focal Companies- Indo Thai Securities Limited and Indo Thai Commodities Private Limited.
- Company is rendering broking and clearing services in the Capital & Derivatives Segments being a Member of National Stock Exchange of India Limited ('NSE'), BSE Limited ('BSE') and Metropolitan Stock Exchange of India Limited ('MSEI') and Depository Participant of Central Depository Services (India) Limited ('CDSL').
- The company is providing various financial services under one roof that are well diversified from trading services in Equity, Future & Options segment and Currency derivatives segment. The company has also taken membership of United Stock Exchange of India limited for currency derivatives segment. The company is head quartered at Indore and they operate through 14 branches located in the state of Madhya Pradesh and Maharashtra.
- They have also started Mutual Fund Service System (MFSS) & Interest Rate Futures from the National Stock Exchange of India Ltd to provide full options of trading under single roof.
- Company has one Wholly Owned Subsidiary Company i.e. Indo Thai Realties Limited and one Associate Company i.e. Indo Thai Commodities Private Limited.
Part – 2 Indo Thai Securities Limited- Shareholding Pattern:
Part – 3 Financial Focus:
Focus on - Financial Results March 2017:
- During 2016-17, the turnover of the Company was 44.13 crore as against 38.63 crore during FY 2015-16 registering an increase of around 14.2%.
- The Profit After Tax during FY 2016-17 is 3 crore as against 6.54 crore in FY 2015-16 registering down by 118%.
Focus on - Financial Results December quarter 2017:
- For the quarter ended 31-12-2017, the company has reported a Standalone sales of Rs 12.91 Crore, up 7 % from last year same quarter Sales of Rs 11.06 Cr
- Company has reported net profit after tax of Rs 6.24 Crore in latest quarter compare to last year December 2016 quarter loss -3.4 Cr. up 70%.
- Promoter stack has been increased
- Stock available at low P/E 5 compare to Industrial P/E 43
- Robust turn over seen in December quarter 2017
- The company has incorporated an IFSC Company which is wholly owned Subsidiary company of Indo Thai Securities Limited named Indo Thai Globe Fin (IFSC) Limited, set up in GIFT CITY, SEZ. Stock exchanges operating in the GIFT IFSC will be permitted to offer trading in securities in foreign currency and also longer trading days than what stock exchanges are currently permitted to do in India. Thus the wholly owned subsidiary acting as financial intermediary in International Financial Market is expected to increase group turnover and profits by tapping growth potential in the market. Indo Thai Securities Limited has also registered itself as Market Maker for SME Segment with NSE. This would result in diversification of services offered by the company and the same is anticipated to add on the existing turnover
- The Asset under Mutual Fund Distribution Business of the company has increased by 27.78 crore during the FY 2016-17.
- The company is also coming up with a new software named WINSTOCK, which provides users with streaming real-time data, and offers fast and easy-touse order entry and execution to meet the needs of traders. Users can trade in equity, commodity, options, currency etc from a single screen for a seamless trading experience
- Steadily rising turnover in financial markets has led to rapid expansion of the brokerage segment. Organized segment of the wealth management industry is rapidly gaining ground, indicating that the sophisticated players are gaining client confidence. Dynamism of mix basket of financial inclusion is the key necessity of today
- The government push on developing the sustainable infrastructure facilities, growth of manufacturing through its 'Make in India' initiative, will present continuing opportunities for financial intermediaries to grow and benefit from the increased requirement of capital for augmenting new capacities and expansion of existing projects
- High purchasing power and people looking to more investment opportunities
- Earning Urban Youth-Size of the Indian capital market and favorable demographics like growing middle class and larger younger population with disposable income and investible surplus focussed on wealth creation will offer opportunities for our wealth management and Mutual Fund distribution business.
- India is already recording the fastest rate of growth within the large economies in the world and various projections for FY 17-18 by the World Bank or IMF etc., indicate that India will continue to occupy the top position. large opportunities to grow diversified businesses.
- Focus on financial inclusion by government, channelizing the untapped savings currently lying in the form of bank deposits and change in attitude from safeguarding wealth to growing wealth will also enhance the participation of investors across segments thereby helping the prospects of equity brokerage business.
- Reforms push by the government relating to 'Make in India', project approvals, land acquisition, mining, and infrastructure, fall in global commodity prices, will lead to capacity expansion and huge investments by both the public and private sector companies.
- Stock CMP is 74 Rs. and stock is trading at P/E 5.6 & TTM EPS 13.78, based on all above investment points, stock may touch 150 Rs. Within 2 years’ time horizon.
- 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.