– NINtec Systems Limited: A High Potential Microcap IT Company

NINtec Systems Limited

Introduction

NINtec Systems Limited, headquartered in Ahmedabad, India. With a market cap of ₹925 Cr., this microcap company is poised for substantial growth, focusing on advanced technologies such as artificial intelligence (AI), machine learning (ML), blockchain and cybersecurity.

Company Overview

Founded: 2015
Listing: Main boards of BSE and NSE (since February 2023)
Global Presence: Headquarters in Ahmedabad, India and a subsidiary in the Netherlands
Customer Base: Serving Fortune 500 companies and SMEs across 18 industry verticals, including automotive, gaming, healthcare and fintech
Revenue Source: 95% from overseas customers

Services Offered:

Business Analytics
Cloud Services
Application Engineering
Testing Services
Application Development & Maintenance
Off/On-shore Software Product Development
Legacy System Development & Software Migration
Search Engine Optimization
Multimedia design & development
Web designing

User Industries:

Automotive
Print Media & Publishing
BFSI
Transportation & Logistics

Area of Expertise:

.Net Development
Game Development
PHP Development
ERP
Wireless, Mobile, WAP Development

International Presence: Serving customers across 30 countries in 5 continents, with a strong presence in European markets, mainly Benelux countries.

Financial Performance and Growth Prospects

Revenue and EBITDA Growth:

Q4 revenue year-on-year growth of 177.9%, with a 190.5% increase in EBITDA for the same period.
Full-year EBITDA grew by 172% year-on-year.

Margin Stability:

Margins are expected to remain strong due to favorable exchange rates, productivity improvements, and reusable components and tools.

Order Book and Pipeline:

Robust pipeline with 95% of revenue from overseas customers. The Netherlands subsidiary plays a key role in securing large deals.

Revenue Breakdown:

FY22 revenue: 79% from Software Export Income, 18% from Domestic Sales, and 3% from Other Income.

Cybersecurity Initiatives:

Setting up Security Operations Centers (SOCs) in India and the Netherlands for real-time monitoring and response to security incidents.

Expansion Plans:

Focus on export markets, leveraging presence in the Nordics, Benelux, UK, and North America.

Key Highlights and Future Outlook

Focus on Cybersecurity:

Investing in cybersecurity, establishing SOCs in India and the Netherlands to enhance service offerings.

Global Expansion:

The Netherlands subsidiary enhances access to European markets, facilitating larger multi-year deals and higher billing rates.

Strong Financial Position:

Clean balance sheet with significant cash reserves and a low debt-to-equity ratio of 0.07.

Commitment to Talent:

Heavy investment in attracting and retaining top talent to stay competitive in AI, ML, and cybersecurity.

Promoter Overview:

Niraj Gemawat, founder and CEO, with over 27 years of experience, leading the company’s growth and innovation.

Challenges and Risks

Market Dependencies:

Heavy reliance on non-English speaking markets poses risks related to geopolitical and economic fluctuations.

Talent Acquisition and Retention:

Constant need for acquiring and retaining skilled professionals in a competitive industry.

Cybersecurity Landscape:

The evolving cybersecurity landscape requires continuous adaptation and investment in research and development.

Investment Perspective

NINtec Systems is a growth-oriented company with a solid track record of delivering exceptional shareholder returns. Its focus on high-value, complex engineering services, particularly in the growing cybersecurity space, presents substantial growth opportunities. While global market volatility remains a key risk, the company’s strong financial position and commitment to talent development provide a solid foundation for future success.