The shares of Softsol India Ltd. (SIL) (Code: 532344) (Rs.39.50) are recommended for steady appreciation in the long-term.
Hyderabad-based SIL specialises in Enterprise Technology Modernisation solutions. It develops custom software in both the dot NET and J2EE environments, modernizes legacy systems and integrates ERP systems. It also helps clients with technologies such as service oriented architecture (SOA) or other ways to implement real world solutions for both industry and government clients.
SIL has plans to set up a new software development facility in Vizag. Apart from expanding its facilities to meet the requirements of growth both from its existing and new customers, it has also identified various areas that will drive the company's growth plans. Some of the key growth drivers for SIL are: Domain expertise, enhancement of service portfolio to clients, new geographies, strengthening its marketing teams and inorganic initiatives.
Based on the above, SIL is likely to post a net profit of about Rs.27 cr. for FY09, which would fetch an EPS of Rs.14. The shares of SIL are currently traded at Rs.39, discounting its estimated FY09 EPS of Rs.14 by 3 times.
Investment in this share is likely to fetch a decent appreciation of over 33% in 6-9 months. The 52 week high/low of the share has been Rs.63/20.
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