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Fourth Dimension Solutions NEW LISING LONGTERM BET

Arjun Chennam at 06:34 PM - Jan 21, 2016 ( ) Views: 1,174

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Fourth Dimension Solutions coming with an IPO to raise upto Rs 8.68 crore  
Accord Fintech
 

Fourth Dimension Solutions

  • Fourth Dimension Solutions is coming out with an initial public offering (IPO) of 28,92,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 30 per equity share.
  • The issue will open on December 30, 2015 and will close on January 07, 2016.
  • The shares will be listed on SME platform of NSE.
  • The share is priced 3 times to its face value of Rs 10.
  • Book running lead manager to the issue is First Overseas Capital.
  • Compliance Officer for the issue is Anchal Gupta.

Profile of the company

The company was incorporated as Fourth Dimension Solutions Private Limited under the provisions of the Companies Act, 1956 vide certificate of incorporation dated June 17, 2011, in Delhi. Subsequently, the company was converted into public limited company pursuant to which the name of the company was changed to “Fourth Dimension Solutions Limited” vide fresh certificate of incorporation dated May 25, 2015.

The company is an information technology (IT) infrastructure, technical support services and operations outsourcing company. FDS is CMMI level 5 company managed by experienced IT, Marketing and Administration Professionals. It provides value to its customers by innovation, accomplishment, trust and long-term relationship through its unique service portfolio and expertise. It is a group of highly talented people and absorbs all problems and converts into meaningful solutions, to meet customers’ business requirements.

The company is engaged in designing, developing, deploying and delivering IT infrastructure and services. It provides range of information technology and consultancy services, including infrastructure services, end user IT support, IT asset life cycle, and integrated solutions. FDS enables large and medium enterprises, Government organization and institutes to reduce their total cost of ownership using an onsite and on-call services, deliver strategic, personalized, full-service Technical Support services solutions with quality, value and commitment to total customer satisfaction.

Its enterprise offerings include compute infrastructure solutions that involve the supply and installation of mission-critical IT assets in Application Delivery, Network and Data Security, Surveillance and whole suite of data storage and back-up solution apart from servers, operating systems, and commercial off-the-shelf software and hardware. The company’s service assignments are mostly tender based contracts awarded to it by Local/State/Central Government bodies. In certain cases, the company bid the tender in consortium with another party which primarily includes RICOH India Limited. The company also started merchant trading of IT and electronic products like tablets, LED TV, Mobile Phone etc.

Proceed is being used for:

  • Meeting the working capital requirements of the company.
  • Issue Expenses.

Industry Overview

India is the world's largest sourcing destination for the information technology (IT) industry, accounting for approximately 52% of the $124-130 billion market. The industry employs about 10 million Indians and continues to contribute significantly to the social and economic transformation in the country. The IT industry has not only transformed India's image on the global platform, but has also fuelled economic growth by energising the higher education sector especially in engineering and computer science. India's cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be its unique selling proposition (USP) in the global sourcing market. India’s highly qualified talent pool of technical graduates is one of the largest in the world and is available at a cost saving of 60-70% to source countries. This large pool of qualified skilled workforce has enabled Indian IT companies to help clients to save US$ 200 billion in the last five years.

India’s IT industry amounts to 12.3 % of the global market, largely due to exports. Export of IT services accounted for 56.12% of total IT exports (including hardware) from India. The Business Process Management (BPM) segment accounted for 23.46% of total IT exports during FY15. The IT-BPM sector in India grew at a Compound Annual Growth rate (CAGR) of 15% over 2010-15, which is 3-4 times higher than the global IT-BPM spend, and is estimated to expand at a CAGR of 9.5% to $300 billion by 2020.

India, the fourth largest base for young businesses in the world and home to 3,000 tech start-ups, is set to increase its base to 11,500 tech start-ups by 2020, as per a report by Nasscom and Zinnov Management Consulting Pvt Ltd. India’s internet economy is expected to touch Rs 10 trillion ($161.26 billion) by 2018, accounting for 5 per cent of the country’s gross domestic product (GDP).

Public cloud services revenue in India is expected to reach $838 million in 2015, growing by 33 per cent year-on-year (y-o-y), as per a report by Gartner Inc. In yet another Gartner report, the public cloud market alone in the country was estimated to treble to $1.9 billion by 2018 from $638 million in 2014. The increased internet penetration and rise of e-commerce are the main reasons for continued growth of the data centre co-location and hosting market in India.

Peer Group Comparison (Rs. in Millions)

 

Company NameYear EndNet SalesPBDITPATEPSPBIDTM %PATM %ROCE %RONW %
Fourth Dimension 201503 6516.39 213.73 129.64 64.82 3.28 1.99 215.57 144.94
TCS 201503 735780.60 210151.00 192569.60 98.32 28.56 26.17 52.71 43.05
Infosys 201503 473000.00 139700.00 121640.00 105.96 29.53 25.72 36.21 26.98
Wipro 201503 412098.00 91965.00 81931.00 33.19 22.32 19.88 32.74 25.61
HCL Tech. 201506 171534.40 68592.00 63459.50 45.13 39.99 37.00 42.65 36.46

Pros and strengths

In the modern world, every company is moving towards digitization which is necessary to stay in the competition and this is what the Fourth Dimension Solutions provides to these companies.

The company is managed by experienced IT, marketing and administration professionals. It provides value to its customers by innovation, accomplishment, trust and long-term relationship through its unique service portfolio and expertise.

The company is a group of highly spirited people and absorbs all problems and converts them into meaningful solutions, to meet its client’s business requirements. The company respects its processes and is well aware of their true worth.

Risks and concerns

The company’s top five clients contributed around 66.39% of its revenues for the financial year ended March 31, 2015. Any decline in its quality standards, growing competition and any change in the demand for its products by these customers may adversely affect its ability to retain them. The company cannot assure that it shall generate the same quantum of business, or any business at all, from these customers, and loss of business from one or more of them may adversely affect its revenues and profitability. However, the composition and revenue generated from these clients might change as it continues to add new clients in normal course of business. It intends to retain its customers by offering solutions to address specific needs in a proactive, cost effective and time efficient manner. This helps it in providing better value to each customer thereby increasing its engagement with its new and existing customer base that presents a substantial opportunity for growth.

The industry, in which it is operating, is highly and increasingly competitive and its results of operations and financial condition are sensitive to, and may be materially adversely affected by, competitive pricing and other factors. Competition may result in pricing pressures, reduced profit margins or lost market share or a failure to grow its market share, any of which could substantially harm its business and results of operations. There can be no assurance that it can effectively compete with its competitors in the future, and any such failure to compete effectively may have a material adverse effect on its business, financial condition and results of operations.

Outlook

Fourth Dimension Solutions is an information technology (IT) infrastructure, technical support services and operations outsourcing company having CMMI level 5 accreditation. The company provides a full range of services to help find, qualify, close and retain lucrative customer relationships. Its dedicated team guide creative and execution activities to ensure complete management of all marketing activities. It helps partners to manage marketing as an ongoing process improving the consistency and success for demand generation efforts, and speeding the time-to revenue for opportunities across the sale cycle. The company’s marketing services are designed with an objective of enhancing brand awareness, spreading geographical reach for its product offerings and enabling sales team through lead generation program. The management of the company is planning to expand its business in order to capture the markets of different cities and for the aforesaid purpose its company requires the additional funds to achieve its targets. The company’s vision is to become a leading IT service provider in all corners and it has already started the work in this regard. 

On the concern side, the company relies on a small number of clients for a large proportion of its income, and loss of this client could adversely affect its profitability. The company has not entered into any technical support service for the maintenance and smooth functioning of its equipment and machineries, which may affect its performance.

On performance front, the company has posted average EPS of Rs 74.15 and return on net worth (RONW) at 77.21% for last three fiscals. However, these earnings are on the paid up equity capital of Rs 1 crore for FY 2013-14 and Rs 2 crore for the remaining two fiscals. For first six months of the current fiscal, the company has earned net profit of Rs 5.88 crore on a turnover of Rs 320.83 crore. If one annualize these earnings and attribute to the post IPO equity then EPS will stand around Rs 10.80.

Financials (Rs. in Millions)

 

ParticularsMar 2015Mar 2014Mar 2013
Net Sales 6516.39  1365.23  172.27 
Total Income 6523.16  1365.71  172.27 
PBIDT 220.51  6.61  1.43 
PBT 197.60  5.50  1.27 
PAT 129.64  3.79  0.87 
Reserves and Surplus 154.29  4.65  0.86 
Net Worth 174.29  4.61  0.95 
Total Debt 8.24  0.00  4.60 
ROCE 217.63  116.51  41.10 
RONW 144.94  136.21  168.22 
PATM(%) 1.99  0.28  0.50 
CPM(%) 2.25  0.33  0.58 
CEPS 18.32  111.95  25.13 
Enterprise Value -658.72  -10.27  1.60 

 

 
 
 
Financial Information 
 
  1. Financials
  2. Charts
  3. MF Holdings
 
  1. Quarterly Results
  2. Profile
  3. Balance Sheet
 
 
 
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(1 to 3 out of 3) - Latest Replies on Top | First | << Previous | Next >> | Last |
Arjun Chennam at 11:16 AM - Jul 23, 2017 ( )

almost 200 touch

 

Arjun Chennam at 06:14 PM - Jan 30, 2016 ( )

FDS has posted following results for three months ended 30th June 2015:
Sales 320 crs
PBT 9.16 crs
PAT 5.88 crs
Expanded Eq 10.89 crs
Annualised EPS 21.60 
Price 43.20
PE 2
Market Cap 47 crs
Promoter Eq 75%
RONW 25.71%

FDS has a MOU with RICOH INDIA LTD whereby both jointly bid and projects together and FDS derives more than 60% revenue by doing work together with RICOH.
Vakrangee is in similar line and has a pe of 25 and market cap of 9000 crs.
Once FDS migrates to main exchange platform it too shall have similar PE as those of RICOH and Vakrangee.
Hold onto yr allotments.

Arjun Chennam at 05:42 PM - Jan 30, 2016 ( )

listed 30     now 69  just  8 days  date  22/1/16     code : fourthdim  (nse)

1 to 3 out of 3

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