Shares of Saksoft have rallied 14% to Rs 343 per share, extending their 6% gain on the BSE in the past two days, after the rating agency CARE Rating upgraded the long-term bank facilities of the company with a positive outlook. The stock of information technology (IT) software products firm was trading at its 52-week high level on the BSE.
“The outlook is ”Positive” as CARE believes that going forward, with the shift in strategy of the company to move into higher margin services in the Information Management space and ability to cross sell services with recent acquisitions, the company is expected to report higher operating profit,” the rating agency said on Thursday, September 6, in rating rational.
The reliance on debt is low and the capital structure is expected to remain comfortable. The outlook may be revised to ’Stable’ if the company is not able to maintain its profitability levels or if there is any adverse change in the capital structure of the company, it added.
The ability of Saksoft to improve its revenues by adding new clients both in information management & testing segments, improve its profitability levels and manage the revenue concentration risk are key rating sensitivities, CARE Rating said.
In past one month, Saksoft has outperformed the market by surging 43% after the company reported a strong 86% growth in consolidated net profit at Rs 69.6 million in June quarter (Q1FY19). It had a profit of Rs 37.5 million in the same quarter last fiscal. Operating revenue increased by 26.4% to Rs 825 million in Q1FY19 against Rs 653 million Q1FY18. The S&P BSE Sensex was down 0.07% during the same period.
At 12:09 pm; Saksoft was trading 11% higher at Rs 334 against 0.24% decline in the benchmark index. The trading volumes on the counter jumped multiple-fold with a combined 1.48 million equity shares changed hands on the NSE and BSE so far.