The company is looking at the high-end software products to improve its profit margins. The scrip, in the last two months, has appreciated from Rs 73 to current levels of Rs 303.7. The stock has the potential for further appreciation.

The backing of a strong group, established distribution network and mix of software and computer peripherals makes it a good bet. The scrip could give more than 100 per cent returns in one year's time. The company has already established a distribution network which will give it an edge over other players.

The company has 1,200 authorised dealers spread across 200 towns in the country and it has the largest distribution network in the IT industry. The company is a market leader in dot matrix printer systems with a 37.7 per cent share followed by Epson (33.3 per cent), Wipro (22.7 per cent). It has the capacity to make 240,000 DMPS and 120,000 UPS systems annually.

The company plans to develop software products for transaction automation in areas like retailing, banking, ATM payments and government departments. TVS Electronics has recently entered the embedded software business by acquiring Sundaram Telematics, another group company. Sundaram Telematics was originally promoted by Sundaram Fasteners for developing telecom software for Lucent Technologies, Germany. Last year, the German firm discontinued sourcing software from Sundaram Telematics, after the acquisition TVS Electronics and is now activating the company with a 10-member team to focus on telecom and IT software.

With both the banking and the telecom sectors expected to invest heavily in technology in the coming years, the company should see change in its fortunes. TVS Electronics has reported a 50 per cent jump in net sales at Rs 126 crore for the nine-month period ended September 30, 1999.