HCL Infosystems

HCL Infosystems plunged more than 30% today !!!!

The business stats of the stock are enclosed -
Share Capital - 33.44 crs
Loans - 81.31 crs
Investments - 122.77 crs
NCA - 340.60 crs
FV - 2.00 rupees per share
Dividend per share - 6.20 rupees
LY Profit - 132 crs

Thus, we have the following estimates -
1. I estimate the total profit for this FY for HCL Infosystems will be close to 105 crores. At a CMP of 180 rupees (close of day - Feb 20th 2006), that amounts to a P/E of 28.66 (profit may be more, but I'd rather be conservative)
2. Consequently, the dividend yield for this scrip will be at 3.44%
3. From a value perspective, NCAV for the stock is only 22.85 however, please note that this is an IT and ITES company which doesn't hold incredible amounts of NCAs .. barring maybe cash. The cash per share held by the company is however 8.67 rupees per share.

At 180 rupees, HCL Infosystems is rather enticing. The enclosed graph may stun you ... (see at the extreme right) ... for a stock which was comfortably between 240 and 260 for most part of the year.












Enclosed are two news stories you may like to read for a better understanding of the events that led up to this bloodbath -

[1] Nokia deal hits HCL Info as brokerages downgrade stock

[2] No reduction in revenues: HCL Infosystems

A very interesting case to analyse and make an investment decision.