DP Money Watch - STG Brings IT Education To The Fore, No Loss With This Stock

July 30, 2007 by krisdhingra
Filed under Financial Markets

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Software Technologies Group (STG) was the industry leader in IT education and a name to reckon with in the mid 90’s. In 1994 it came out with its IPO at a premium of Rs. 45 and got listed at Rs. 85. STG holds a gold certified status in the Microsoft partnership programme in Learning Solutions. It is also associated with IBM Education centre for IBM Software like Lotus Notes, WebSphere and DB2. It’s alliance with Pearson Vue helps students to appear for certificate tests at STG Centres spread across the country.

With regards to IT Education, STG has recently come out with a programme named Final Touch . Final Touch is like a finishing school to supplement the enggineering college education. It’s target is to stem the problem of talent crunch in the market. According to Nasscom, there are 400,000 engineers graduating in the country every year but only one in four is employable in the IT sector. There is likely to be a demand of 500,000 software professionals in next five years. So there is no dearth of jobs, but it is the mismatch between what the colleges produce and what the industry demands that is of great concern. Final Touch provides IT professionals and graduates the opportunity to gain both practical and hands -on experience and prepares them to address the challenges of present and next generation IT needs. Final Touch is a four month Power Packed Program, the admission to which will be through an IT fundamental entrance test. Students will be awarded with STG Certified Software Professional credentials with super specialization in any one of the IT tracks like dotNet, Java EE, LAMP, Databases or Networking. This course will also prepare the students for various industry acclaimed IT certifications. As the industry needs students with solid hands on experience, live projects will form integral part of the curriculum.(Source)

STG is also into Consulting and Software Development. On the consulting front it has a long term association with Infosys Technologies. STG is responsible for implementing Infosys Finnacle product in most of the Banks. It’s Equity Capital stands at Rs. 12.5 crores and BV is Rs. 18 as on 31st March 2007. Over the last few quarters it’s financial performance is turning for the better. (Read Below)

Scrip Code : 532293 Company Name : Software Technology Group International Ltd

Type	UnAudited	UnAudited	UnAudited	UnAudited	UnAudited
Date Begin	01 Jan 07	01 Oct 06	01 Jul 06	01 Apr 06	01 Jan 06
Date End	31 Mar 07	31 Dec 06	30 Sep 06	30 Jun 06	31 Mar 06
Description	Value(Rs. million)
Net Sales	36.28	28.36	49.62	30.72	33.54
Other Income	2.84	0.83	1.22	0.2	2.07
Total Income	39.12	29.19	50.84	30.91	35.61
Expenditure	-31.33	-22.9	-34.96	-24.71	-28.89
Operating Profit	7.79	6.29	15.88	6.2	6.72
Interest	-2.31	-1.7	-1.84	-1.61	-1.53
Gross Profit	5.48	4.59	14.05	4.58	5.19
Depreciation	-1.88	-1.93	-2.27	-1.81	-2.52
Profit before Tax	3.6	2.66	11.78	2.78	2.67
Tax	-1.48	-1.14	-3.31	-0.17	-0.97
Profit after Tax	2.12	1.53	8.47	2.61	1.7
Extraordinary Items	-	-	-3	-	-
Net Profit	2.12	1.53	5.47	2.61	1.7
Equity Capital	124.98	124.98	124.98	124.98	124.98
EPS	0.17	0.12	0.44	0.21	0.14
Nos. of Shares - Non Promoters	4890371	4890371	4890371	4839604	4839604
Percent of Shares - Non Promoters	39.12	39.12	39.12	38.72	38.72
Result Type	Q	Q	Q	Q	Q

Data downloaded from BSE India

STG also has the following subsidiary companies:

STG International Inc. NJ USA
STG Inc. USA
STG Australia Pvt Ltd.

Considering the Market capitalisation of Rs. 17 crores (CMP Rs.17 ) for the company, its Fixed Assets, its book value of Rs. 18, ever growing and high margin businesses of IT Education, Software Development, Consulting and System Integration in which the company operates, its association with Microsoft, IBM , Infosys and others, the share appears to be Underpriced. One can invest in this scrip at CMP .Share price can double from its present value in the short term and triple in the long term. Downward Risk is almost Nil.

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision.

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