NEW DELHI, April 27: June, 1996 was not a very cheerful time for investors in primary market. Very few would have then ventured into the market to subscribe to public issues. But those who did would now be laughing their way to the bank, at least in CyberTech Systems & Software. The return in this IPO today is an amazing 733 per cent, in less than two years.CyberTech's maiden public offering in June 1996 was at a price of Rs 30 and the scrip, on April 21, touched a high of Rs 250 on the Mumbai Stock Exchange. After CyberTech announced its fiscal 1998 results, market correction has pulled the scrip down to Rs 222. The board declared a dividend of 20 per cent.
The interest in the counter is reflected in the sharp rise in trading volumes. On April 10, a whopping 1.09 lakh shares were traded on the BSE.
The average daily volumes have also gone up substantially from its earlier level of 5000 shares to around 10,000-12,000 shares on the bourse.
In the recent mad rush for any scrip with a software tag,this Mumbai-based company, backed by strong fundamentals, stands apart. In fiscal 1998, CyberTech earned a net profit to Rs 7.45 crore, up 44 per cent over the fiscal 1997 figure of Rs 5.18 crore. Although during the year its total sales went up by 63 per cent to Rs 13.01 crore (Rs 7.87 crore), a whopping 116 per cent rise in total expenditure to Rs 4.66 crore and depreciation rise of an identical magnitude to Rs 70 lakh didn't permit its net profit to surge by as much. In fiscal 1998, on an equity base of Rs 5.05 crore CyberTech's earning per share now stands at Rs 14.75 (Rs 10.27). During the year its book value surged to Rs 33.78 from the earlier Rs 21.22. During the year this Mumbai-based company quite comfortably surpassed its projections made during its initial public offering with its actual net profit being 154 per cent higher than the projected Rs 2.93 crore. Its actual sales turnover was 42 per cent higher than the projected Rs 6.99 crore. As against the projected EPS of Rs 5.80, CyberTech's actualEPS now stands at Rs 14.75.
Recently CyberTech International of USA, its foreign associate has decided to hike its stake in the Indian firm to 51 per cent. Also CyberTech System's decision to invest Rs 20 crore to set up a software development centre to tap high growth areas like Y2K problems should act as positives for the company. This will reduce CyberTech's excessive dependence on the ERP projects being handled by its foreign partners for which the Indian arm supplies the software professionals.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
