Monday, January 30, 2012

R S Software Ltd.......talking about concerns...


i have few concerns about R S software...

-low promoter holding

-no competitve advantage to preserver the margin

-high dependence on few clients fr revenue e.g. visa

please clear my doubts.
I got this question from a readers ABC.I have put it on front page so that others can also read it and read my reply as well.
I have been writing time and again that please read my reply to comments but I am sure many do not do it and hence taken this oppertunity to write it here so that readers can understand how to look at things and understand the Co and how market price it.
My reply is as below:
1) All his concerns is with the market as well and that is the reason why R S Software Ltd is going cheap.R S Software is quoting at 2.5P/E.....with and eps of 20.....why?It is a debt free Co and divident paying Co .It is in Payment Gateway sector which is still in nascent stage in India then why market is not discounting high?
The reason is market has the same concerns like ABC and that is why it is not priced high.
2)Before asking any question one needs to go through the latest AR and  Co website which is easily available at bse website.Go through who the management is, who is at the helm of affairs , what experiance they have got , what is their future plan and read the risk and oppertunity discussed by the management ,etc.
Go to website and click each and every link and read  them and see whether your concerns are addressed or not.
Let me tell you all , that when I give a call here, I do everything what I have written here.What you get is  a ready stock which can give big returns if everything goes well.That will always remian in hand of the market and how Co does in future.We have to take that calculative RISK and invest in a Co which is showing promise and that is how multibaggers are picked.Take chance.......there is no sureshot way that we will end up with a multibagger every time we pick a stock.After all it is a business and one bad decision and it cost the Co very dearly.
If one wants to derisk the investment better buy TCS /Infy/Wipro......where there can be no question asked........
and now ABC's concerns:
1)-low promoter holding....In IT Cos we usually see low promoters holding.But the positive here is the CM, Ranjit Rai Jain is constantly buying from the market .This can also be seen through bse website.Click Filing and other Info tab and one can see that he is buying......
05/10/11 Rajnit Rai Jain B 15,200

29/09/11 Rajnit Rai Jain B 10,500

26/09/11 Rajnit Rai Jain B 9,600

23/09/11 Rajnit Rai Jain B 26,500

22/09/11 Rajnit Rai Jain B 38,670

I have copied paste it here so that readers can see where to look after walking through what I have written.
This is what I call baby sitting......I can't do for each and every stock.That is for readers to do.
But if CM is buying from the market, I don't have to teach what that means.
2)-no competitve advantage to preserver the margin and -high dependence on few clients fr revenue e.g. visa

For this concern ,one can get the answer while reading the latest AR which is already posted at bse site and going to Cos website.Read it throughly and try to make out what is coming up.

I again  write, read what I have written thoroughly , read each and every sentence 2-3 times.Each sentence and each para has its meaning.Read again and again.
I have often seen that readers don't understand what I am trying to say and ends up the otherway round.......and that goes for everything I write .......


  1. thank you sir...i agree on getting complacent and apologise

  2. Hi ABC,
    There is no need to apologize.
    I put your quesry at front page only because I wanted my readers to know what exactly need to be lookedupon.
    There are still scores of readers who don't follow these simple formula.
    If I work so hard why don't my readers work hard?
    But I hope u must have read my reply properly.Apart from going through AR and Co website, one need to understand the market as well.
    Your all concerns is with market as well and that is why it is available so 2.5 P/E...that is the bottomline....

  3. and now with growth coming in sales and bottomline, market can discount R S Software higher in coming months.....

  4. (RTTNews) - Venus Remedies Ltd. has achieved another landmark by fetching its first patent grant from Japan patent office or JPO for its novel research product 'Vancoplus', which has been designed to curb the growing bacterial resistance specially caused by the notorious Methicillin-Resistant Staphylococcus or MRSA strain which is usually termed as one of the Superbugs.
    The company intends to launch this research product in early 2015. Currently, Vancoplus is available in emerging markets and is under registration in many countries. Venus intends to our-license Vancoplus across patent protected regions to major pharmaceutical players.
    The drug restricts the expression of efflux pump and down regulates the mec A gene and PVL expression by MRSA pathogens. This enables the drug to act against resistant strains and prevent development of resistance which drastically reduces the treatment time.
    During the past four decades, MRSA has evolved from a controllable nuisance into a serious public health concern. Vancoplus is the only known remedy to control MRSA, VRSA (Vancomycin Resistance Staphylococcus Aureus) and multi-drug resistant bacteria, which causes meningitis, pneumonia, typhoid, septicemia, urinary tract infection, skin and skin infections and staphylococcal endocarditis.
    The market size of MRSA in the world accounts for $900 million. At present, it is growing with CAGR of 4.8 percent, which is estimated to reach to $1.2 billion by 2017. Studies indicate that the incidence of MRSA in the past few years has extensively increased worldwide, with the prevalence of MRSA in Japan, US and southern European countries ranging from 20 percent and 60 percent.
    Having launched in the various emerging markets across the globe, Vancoplus has undergone various pre-clinical studies as per OECD guidelines, multi-centric Phase III and Phase IV clinical trials and efficacy is also established through a series of microbiological studies carried out as per CLSI guidelines.
    The company has also received patent for Vancoplus from the US, South Africa, New Zealand and Ukraine. Vancoplus is a boon for the medical field as it it not only cost effective but also reduces treatment time. This patent grant for Vancoplus is valid up to February 2026.
    Japan has a growing elderly population and high health expenditure with second largest per capital spending in the Asia Pacific region. The company is hopeful of gaining a fair share of the MRSA market. Methicillin-Resistant Staphylococcus Aureus is exceptionally critical to infection treatment and control in the health-care setting. MRSA has been detected at high levels in Japan.

  5. How do you see the warrants being issued by the promoter of RS Software? This would dilute the earnings.

  6. Hi SS GB,
    Yes,I read that annoucement.I don't think that will have major impact on earnings.
    The warrents which will be alloted and will get converted to shares are 15 lacs, means the eq will go up by 1.5 cr.
    That is something around 13% of eq which promoters actually will raise their stake from now 29% to 42% which also will give answer of one readers ABC.
    The way the earnings are coming I think for those 15 lacs shares will be taken care of very easily.
    Moreover these warrents will get converted after 18 months and by that time , if the growth remains what it is now, I see no problem for increasing tyhe eq by 13%......

  7. Dear Sir !
    Put a glance on Ucal & veljan plz.


  8. Hi sbk,
    Both are good but Veljan Denision Hydraulics looks excellent to me.......

  9. Priya Ltd has posted pathetic results. Do u suggest a hold?

  10. Ramesh,
    No sense holding it now...I suggest a switchover...maybe B L Kashyap or Sicagen

  11. Mitzz,
    I have faith in Venus and it should perform sooner or later.....

  12. Rajeev,
    I have 1000 shares of Priya Ltd and B L Kashyap. Accumulated losses of 42% in each. Am in a fix now.

  13. ramesh,
    Convert Priya Ltd to B L Kashyap....and remember one thing....don't hang on to loss which becomes big...sell stocks which goes down by 15-20% or is also about taking loss....Small investors make this mistake time and again...they hang to the stock when it goes down.....and loss keeps on going up....sell stocks even in loss and find stocks which can make up that loss.....