Oracle Fin Ser

The market is currently a little jittery when it comes to delisting theme as two company promoters have announced plans to reduce their stake and bring it to 75% rather than go for delisting. This company is also a ‘delisting hope’. The promoters of the company, computer giant, Oracle Global holds 80.36% stake in the company and there has been news around that they plan to delist. The company provides software requirements to top BFSI players across the world and had one of the highest net profit margins in Q1 and Q4FY12 but it slipped down in Q2FY13, to 27.20% from 40.42% in Q1FY13 and much down from 68.84% in Q4FY12.  For the current Q2, its consolidated topline, YoY was up 5% at Rs.793 crore but net profit slipped 25% at Rs.157 crore. The poor performance can be blamed on delayed signing of service contracts and cost increase due to wage hikes.

In terms of geographic business, for Product business, JAPAC (Japan and Asia Pacific) was the big contributor, while in Q1, it was Europe, Middle East and Africa (EMEA). In services, it remains North America and in terms of total contribution to the revenue, it is JAPAC, followed by EMEA and then North America. Top 10 customer’s contribution fell from 40% to the revenue in Q1 to 37% and its attrition rate came down QoQ from 18% to 15%. Total employee strength has gone up to 10.131 from 9786. Rupee appreciation and down turn in user countries are the inherent risk factors though, looking ahead, on the Indian bourses, delisting theme remains intact.