Appreciate you sharing the excerpt.
It does grab ones attention, but that “may” in their conclusion really doesnt help. Either state that it is the case, or it isnt.
And yes, the finsncial performance of the company has gotten better after the pandemic, benefitting from the digital shift, resulting to us seeing the LIC and the other such renowned entities.
All in all, it is a small IT name that could grow given the IT positive environment we have in the world and India. Because it is small, its health isnt and wont be as good as a TCS. Its debt could be higher in the future, but how else is a local company going to grow ? Its not famous yet to raise capital, leaving debt as the only way to go about it. Also, unlike other IT names DSSL provides actual products to its clients hence the inventory hence the need for debt.
One of the goods is that this company is purely a domestic IT play with big domestic clients like LIC. Unlike other famous IT firms where 90%+ revenue is dependent on foreign demographics, DSSL works with our own people.
Again, it is a small firm, so it is given that it wont have, now and till the time it works with many more remnowned clients, it wont have a TCS like balance sheet, it cant and, it shouldnt either because if they start focusing on getting a dent free balance sheet, they will surely lag behind in growth.
Uncertainities and hard to digest information has to be expected, it has to be. It could become great tomorrow, then not so great the following year, and the cycle continues till the time it becomes a go to partner for all its clients, which is the aim isnt it ?
Its a small name, that is working to be known, and if they are able to work with entities like LIC and such public banks ? They know something about closing deals that we dont.
Yes, I am invested. And will be.
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