One reason why investors are comfortable with this company is due their capital allocation policy. It becomes much more easier to trust numbers of smaller companies when all profits are distributed out. IPO fresh issue was also minute. (this is the one point which helped me alot despite them hiring a very young CFO who hardly has any experience )
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Minimum Capex & other expenses
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Complete off-shore model
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Promoter taking out money via dividends only
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Good growth momentum ( 1 year fwd PE at 23 + 3% div yield ) for older investors div yield is above 10%
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Acquisitions don’t make sense as it will be margin dilutive.
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All work is digital & no exposure to legacy systems (slow growth)
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Employee cost is low as major employees are at the lower end of the pyramid ( this won’t be sustainable if they keep growing ). Also they do not have presence in main metro cities where the salary cost is the highest.
Disc– Invested & Biased
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