Aurionpro Solutions- Inflection Point From Product Driven Growth?

@suyogdhavan wrote:

Founded in 1997 Aurionpro solutions is a IT (software) products company. This company has 24 offices in 14 countries. While its North American headquarters is located in San Ramon, California; its global headquarters is located in Mumbai.
For more info check, http://www.aurionpro.com/

NUMBERS - THE LATEST
Market cap: 459 crores CMP on Day2 Feb2018: Rs 194 BV: 281
Revenue FY17: 638 cr Net profit FY17: 43 cr approx FV: 10

POSITIVES

1. The transformation of the company is evident in the results of the last 2 quarters, where it has managed a operating profit margin of around 17%
2. The company has over 1300 employees and around 29 Fortune 500 customers.
3. Aurionpro sold its global Access Management business to KPMG for around 200 crores.
4. For half year FY2018 the company EBITDA grew by 43% and net profit grew by 76% and the story of transformation has just begun.

INTERESTING INFO

1. Aurionpro which recently sold one of its division to KPMG at approx 200 crores is available at a market cap of around 450 crores.
2. It will be really interesting to see how this 200 CR will be utilized. Common sense and logic tells me a portion would go for retiring debt, one portion to invest in growth areas, one portion as reserves and one portion as a substantial dividend. We need to watch this space.
3. Aurionpro is participated in Money2020 to be held in Las Vegas in Oct 2017
4. Company is winning new orders from diverse set of customers from various geographies. Details can be found in their website

NEGATIVES - POSSIBLE RISKS

1. Any global political or economic shock could impact the share price of this company.
2. As the promoter holding is relatively low for this small cap, this stock could be highly volatile.

MY TAKE
Aurionpro solutions is a company that has undergone a structural transformation. Over a period of 4 years, the management has methodically transformed this company from a software services company to almost a software products company. The positive consequences of this transformation will play out over the next 1 - 3 years.

The focus areas of the company are Enterprise security and Digital innovation. Both these are high growth areas that offer tremendous potential. Apart from this the company is also into various banking, logistics and government solutions. Looking at the future scope and trajectory of this company, it is deeply undervalued, and all set to make higher highs over the coming months and years.

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