Datamatics Global Services is a small-cap IT stock with a market capitalization of over ₹2,800 crore. The company provides intelligent solutions for data-driven businesses to increase productivity and enhance the customer experience.
With a complete digital approach, Datamatic's portfolio spans across Digital technology solutions, Business process management, and Engineering services powered by Artificial intelligence.
The company shares, which were trading at ₹46.40 apiece three years ago, were now valued at ₹476.40, resulting in a remarkable gain of 926%. Further, the stock zoomed 304% in the five-year period. In contrast, the Nifty IT index gained 110% in the same period.
On May 19, the stock zoomed 8.75% to mark a new lifetime high of ₹511 apiece. At current levels, it is trading 86% higher than its 52-week low of ₹256.
Investors were elated by the company's Q4FY23 performance, which was released on April 28. Since then, the stock has experienced a one-way rally, gaining 51%. This boom has resulted in a stunning gain of 72% in the current year so far.
During the quarter, the company achieved a consolidated net profit of ₹58 crore, representing a YoY growth of 28.8%. For the full fiscal year 2023, the company recorded a consolidated net profit of ₹185 crore, an increase of 19.35%.
The company's revenues experienced a robust YoY growth of nearly 33%, reaching ₹416 crore in Q4FY23. Notably, the Digital Operations business, which contributes 45% of the company's revenues in Q4, exhibited a growth rate of 31.6% YoY, amounting to ₹187.50 crore.
Furthermore, the Digital Experiences and Digital Technologies segments witnessed substantial YoY increase of 48.8% and 29.4%, respectively. Overall, in FY23, the company's revenue surged by 21.48% to reach ₹1,459 crore.
According to the company's exchange filing, revenue distribution across different geographies in FY23 shows that the USA accounted for the highest share at 54%. Following closely behind, India, UK, and Europe collectively contributed 39% of the company's revenue.
In terms of revenue by industry, the BFSI sector contributed 24% to the company's revenue during FY23. Additionally, the education and publishing sector accounted for 22%, and the technology & consulting sector constituted 19% of the company's revenue.
Further, the EPS (Earnings Per Share) improved to ₹5.37 in Q4FY23 from ₹2.31 in the year-ago quarter.
At the prevailing price, the stock trades at a price-to-earnings multiple of 14.9x, which is much lower compared to the industry P/E of 46.3x.
On the financial ratio front, the company has zero debt, Trendlyne data showed, while it had an ROE and RoCE of 13.43% and 17.22%, respectively, in FY23.
The company on May 03, said that it had entered into a strategic partnership with Alkermes, a global biopharmaceutical company. The partnership is focused on enhancing Alkermes’ patient support services for people prescribed Alkermes medicines, it added.
The promoters own 70.9% of the shares in the company, while foreign portfolio investors own 2.7%. Regular shareholders own 26.4%, according to Trendlyne.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
