Mindteck appears a hidden gem in IT sector and is perhaps the most undervalued scrip. Its market cap is lowest and is a great buy at current levels. Investors are recommended to buy this stock and hold on for medium term for huge appreciation.

1. Hidden Gem in IT Sector-MINDTECK(INDIA)LTD MINDTECK (INDIA) LTD Bangalore based Mindteck in Product Engineering and IT space is on path of strong growth and investment at current market price may fetch multibagger appreciation in next 24 months: For FY14, on Revenue growth of 24%, Mindteck's PAT zoomed by 1657% For Q1/FY15, on revenue growth of 8%, PAT has escalated by 53% Scrip is available at 7.65xFY14 Eps of Rs 7.59 Scrip is available at 5.80xFY15E Eps Market cap is 0.43%xFY14 Revenues which is the lowest in IT sector as even small cap IT companies are trading at 1.50-2.00xRevenues BACKGROUND: Mindteck's core business is Product Engineering and Information Technology Services. The verticals of focus include Data Storage, Smart Energy, Life Science adn Government. PRODUCT ENGINEERING; The Product Engineering busienss unit encompasses Data Storage, Electronic Design Services , Smart Energy and Wireless. Data Storage: Mindteck provides product development services in Data Storage technologies to world leaders in the storage industry Electronic Design Services: Mindteck's EDS group provides core embedded technology solutions to its clients with a constant focus on cost effectiveness and added value. Company offers a cmplete range of Electronic Design Services to address all aspects of the product lifecyle, cost-effectively and on time. Various phases of Product Life Cycle are supported through expertise in technologies and processes developed for new product designs, verification and validation and system solutions. The EDS focuses on conceptualisation and new prooduct development. Embedded Verification and Vaalidatin services provides proudct valiation and verificatin services Smart Energy and Wireless: Mindteck is an established player in ZigBee and 6LowPan wireless tack development and support services for fab and fabless semiconductor clients. Co mainly focuses on long-short-range wireless communication and wireless sensor networks to design and develop wireless monitoring and load control solutions in automation space. Mindteck has further developed its expertise in providing the communication stack for an electric vehicle charger in compliance with AE and IEC standard. INFORMATION TECHNOLOGY SERVICES: Mindteck's IT Services business unit consists of multiple sub-units

2. such as General Application Development, Government, Life Sciences, Semiconductors,Cloud and Big Data. Life Sciences: Life Sciences at Mindteck provides software and hardware solutions to some of the world leaders in analytical instruments and medical devices. Delivery quality of Life Science has been extremel consistent with five projects were assessed at CMMI Level 5 Government: This vertical helps State and Local government agencies seize opportunities amid the significant challenges and change they are facing today. Mindteck delivers projects around Application Development, Program and Project Management, Business Analysis, Testing, Strategic Consulting and Professional services. Semiconductor: Mindteck provides software and hardware solutions for semiconductor industry for improvign equipment software features and performance and increase productivity Cloud Computing adn Big Data: Mindteck's vertical helps existing customers migrate their IT infrastructure to Amazon Cloud. VCDC is an IAAS offering developed by Mindteck to create a hybrid cloud between the private cloud andpublic cloud to provision resources. Company is also embarking on Big Data Analytics based projects in the monitoring and control space. Storage Testing; This vertical is primarily aimed at providing skills, people, processes and infrastructure to enable customers build and enhance product quality in storage space. Wireless Design: This vertical is focusing on providing monitoring and control solutions by designing building blocks required for wireless connectivity for IOT. FINANCIAL PERFORMANCE; 2013-14 2012-13 Rs/Cr Rs/Cr Revenue 328.80 264.30 EBIDTA 29.90 4.10 PAT 18.61 1.05 EPS Rs 7.59 0.43 Mindteck posted superb results for FY14 wherein it recorded 24% growth in revenues but PAT ZOOMED BY 1657% to 18.61 crores. EBIDTA was 9.10% as against 1.55% in previous year. Company declared dividend of Re 1 per share Important developement during the year was launch of two innovative systems: IGNITE, an Energy Management System which transforms office buildings, into energy efficient smart buildings, and ProdXL, an Enterprise Productivitity Improvement Solution designed to provide insightful quantittative feedback to drive employee behaviour towards

3. organisation productivity improvement. Mindteck's Top 10 clients contribute 77% of total revenue Top 5 clients contribute 64% of revenue USA accounts for 79% of revenue. APAC and EMEA contributing 11% and 10% respectively. Headcount stands at 916 with Onsite Revenue standing at 32% and OffShore at 68% FUTURE OUTLOOK: Q1/FY15 2014-15 2015-16 Rs/Cr Rs/Cr Rs/Cr Revenue 82.40 370 450 PAT 4.97 25 32 Equity 24.57 24.57 24.57 EPS Rs 2.02 10.15 13 Mindteck has reported much improved nos for Q1 wherein its revenue have gone up 8% but PAT has JUMPTED BY 53%. Mindteck is like to witness HUGE GROWTH from its PRODUCT ENGINEERING SOLUTIONS, IGNITE (Energy Management Systems) and ProdXL (Enterprise Productivity Improvement Solutions). Mindteck can also expect decent growth in solar energy monitoring solution. Company is already monitoring 100000 solar installations. Mindteck is in the process of enhancing solution to enable it to scale upto 100000 PV installations across multiple servers and geographies VALUATIONS: Mindteck appears a Hidden Gem in IT sector and is perhaps the most undervalued scrip. Its market cap is lowest (amongst small cap companies having similar or even lower revenues): MindTeck Moldtek Sasken R System McapxRevenue 0.43 1.94 1.55 2.31 Mindteck's Market cap currently is just 0.43xRevenue whereas market cap of Moldtek Technologies (whose revenues are just 34 crores) is 1.94xRevenue. Sasken revenue is 363 crores but market cap is 1.55xRevenues. Revenue of R System at 270 cr is lower than that of Mindteck but marketcap is 2.31xRevenues. Further: Mindteck is trading at 5.70xFY15E Eps Mindteck is available at 4.46xFY16E Eps Mindteck appears a GREAT BUY at current levels. IT companies will continue to do well in coming hears and Mindteck can deliver

4. MULTIBAGGER appreciation in next 24 months when its share price can be Rs 175-225 (depending on market conditions). Investors may buy BIG quantity and hold on for medium term for huge appreciation. Same author had recommended ZENSAR @ Rs 230 CB, Tata Elxsi @ Rs 160-180, Hexaware @ Rs 78. --
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