STAKEHOLDERS EMPOWERMENT SERVICES€¦ · 2015 "Listing Regulations, 2015", the Company should have...

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STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SECTOR: IT-SOFTWARE REPORTING DATE: 6TH DECEMBER, 2017

SUBEX LTD. www.subex.com

Subex Ltd. NSE Code - SUBEX TABLE 1 - MARKET DATA (STANDALONE) (AS ON 04TH DECEMBER, 2017)

Sector - IT - Software NSE Market Price (`) 8.50 NSE Market Cap. (₹ Cr.) 478.26

Face Value (`) 10.00 Equity (` Cr.) 562.00

Business Group – N.A. 52 week High/Low (₹) 12.35/7.65 Net worth (₹ Cr.)* 720.63

Year of Incorporation - 1994 TTM P/E (TTM) 15.45 Traded Volume (Shares) 46,96,176

TTM P/BV 0.66 Traded Volume (lacs) 399.17

Registered Office - Source - Capitaline, TTM - Trailing Twelve Months, N.A. - Not Applicable,* As on 30th September, 2017

RMZ Ecoworld Outer Ring Road, COMPANY BACKGROUND

Devarabisanahalli, Subex Limited is a holding company, which provides software products and related services

to communications service providers across the world. The Company also provides

implementation and customization, support services, managed services and sub-

contracting services. Its segments include Software Products and Software Services. It

provides business and operations support systems (B/OSS) solutions to telecom service

providers. It offers the Revenue Operations Centre (ROC) solution suite for business and

capex optimization, which has solutions for Revenue Analytics, such as ROC Revenue

Assurance, ROC Fraud Management and ROC Credit Risk Management; for Cost Analytics,

such as ROC Partner Settlement, ROC Route Optimisation and ROC Cost Management, and

for Network Analytics, such as ROC Asset Assurance, ROC Data Integrity Management and

ROC Capacity Management. It operates across the Americas; Europe, the Middle East and

Africa (EMEA), and Asia-Pacific (APAC) and rest of the world.

Bangalore – 560 103, Karnataka

Company Website:

www.subex.com

Revenue and Profit Performance

The revenue of the Company increased from ₹75.05 crores

to ₹77.80 crores from quarter ending Sep’16 to quarter

ending Sep’17. The Company made a profit of ₹3.10 crores

in quarter ending Sep’17 vis-a-vis making a profit of ₹3.21

crores in quarter ending Sep’16.

Source: Moneycontrol

Performance vis-à-vis Market

TABLE 2- Returns

1-m 3-m 6-m 12-m

Subex Ltd -4.49% -1.18% -13.71% -14.57%

Nifty -3.11% 1.91% 4.98% 23.95%

Nifty IT 2.24% 5.64% 5.04% 11.33%

Source - Capitaline/NSE

77.8085.73 75.05

3.10 -33.53 3.21

-50

0

50

100

Sep'17 Mar'17 Sep'16

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

0.50

0.70

0.90

1.10

1.30

1.50

Dec 16 Feb 17 Apr 17 Jun 17 Aug 17 Oct 17

Subex Ltd NIFTY NIFTY IT

http://www.subex.com/




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TABLE 3 - FINANCIALS

(₹ Cr.) Sep’17 Mar’17 Sep’16 % Change

Sep ’17 vs Mar’17 Mar’17 vs Sep’16

Net Worth 720.63 637.26 653.51 13.08% -2.49%

Current Assets 180.63 226.56 528.75 -20.27% -57.15%

Non-Current Assets 757.95 698.07 751.78 8.58% -7.14%

Total Assets 938.58 924.63 1,280.53 1.51% -27.79%

Investments 657.02 657.01 717.71 0.00% -8.46%

Finance Cost 1.92 3.04 3.33 -36.84% -8.71%

Long Term Liabilities 2.57 2.50 2.70 2.80% -7.41%

Current Liabilities 215.38 284.87 624.32 -24.39% -54.37%

Turnover 77.80 85.73 75.05 -9.25% 14.23%

Profit After Tax 3.10 -33.53 3.21 N.A. -1,144.55%

EPS (₹) 0.06 -0.66 0.06 N.A. -1,200.00%

Source - Money Control/Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Auditors have not raised any qualification in FY 2014-15, FY 2015-16 & FY 2016-17.

However, Auditors have drawn attention on certain matters under Emphasis of Matter in FY 2015-16 (Annual Report FY 2015-16

page 82) & FY 2014-15 (Annual Report FY 2014-15 page 83).

Response Comment

Frequency of Qualifications No -

Have the auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited financial statements? No -

TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT - FY 2016-17)

Regulatory Norms Company

% of Independent Directors on the Board 33% 75%

% of Promoter Directors on the Board - 0%

Number of Women Directors on the Board At least 1 2

Classification of Chairman of the Board - Independent Director

Is the post of Chairman and MD/CEO held by the same person? - No

Average attendance of Directors in the Board meetings (%) - 80.00%

Composition of Board: As per Regulation 17(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 "Listing Regulations, 2015", the Company should have at least 33% Independent Directors as the Chairman of the Board is

an Independent Director. The Company has 75% of Independent Directors and hence, it meets the regulatory requirements.

Board Diversity: The Company has 4 directors out of which 1 is male and 3 are female. (Ms. Priyanka Roy resigned from the post

of Director of the Company with effect from March 10, 2017. Ms. Poornima Prabhu was appointed as an Additional Independent

Director with effect from March 24, 2017.)




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TABLE 5 - FINANCIAL RATIOS

Ratios Sep’17 Mar’17 Sep’16

% Change

Sep ’17 vs

Mar’17

Mar’17 vs

Sep’16

Turn

ove

r

Rat

ios

Inventory Turnover N.A. N.A. N.A. N.A. N.A.

Debtors Turnover 0.54 0.45 0.16 19.37% 191.21%

Fixed asset Turnover 0.10 0.12 0.10 -16.42% 23.02%

Current Asset Turnover 0.43 0.38 0.14 13.83% 166.59%

Ret

urn

Rat

ios Operating Profit Margin 10.24% 16.59% 7.20% -38.24% 130.53%

Net Profit Margin 3.98% -39.11% 4.28% N.A. -1,014.42%

Return on Assets (ROA) 0.33% N.A. 0.25% N.A. N.A.

Return on Equity (ROE) 0.43% N.A. 0.49% N.A. N.A.

Return on Capital Employed (ROCE) 0.43% N.A. 0.49% N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 0.84 0.80 0.85 5.45% -6.09%

Quick Ratio 0.84 0.80 0.85 5.45% -6.09%

Cash Ratio 0.17 0.13 0.07 30.62% 78.72%

Working Capital Turnover ratio -0.09 N.A. -0.03 N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio 0.12 0.13 0.15 -11.76% -11.02%

Interest Coverage Ratio 4.15 4.68 1.62 -11.26% 188.45%

Trad

ing

Rat

ios

Market Cap / Sales 6.00 6.50 7.43 -7.82% -12.46%

Market Cap/ Net Worth 0.65 0.87 0.85 -26.02% 2.55%

Market Cap/PAT 150.47 N.A. 173.71 N.A. N.A.

Market Cap/EBITDA 58.53 39.21 103.26 49.26% -62.03%

Source - Money Control/Stock exchange filing

TABLE 6 - TRADING VOLUME

Particulars Sep’17 Mar’17 Sep’16

% Change

Sep ’17 vs

Mar’17

Mar’17 vs

Sep’16

Trading Volume (shares) (avg. of 1 qtr) 32,44,839 35,22,069 75,66,860 -7.87% -53.45%

Trading Volume (shares) (high in 1 qtr) 2,31,94,162 3,89,15,031 3,97,01,716 -40.40% -1.98%

Trading Volume (shares) (low in 1 qtr) 8,10,595 5,37,869 19,04,840 50.70% -71.76%

Ratio - High/low trading volume 28.61 72.35 20.84 -60.45% 247.13%

Ratio - High/average trading volume 7.15 11.05 5.25 -35.31% 110.58%

Source - Capitaline




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TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

Sep-17 Mar-17 Sep-16 Comments

Shar

eho

ldin

g (%

)

Promoter

shareholding 0.17 0.19 0.19

• The Company issued 5,50,94,999 equity shares of face

value ₹10 each to non-promoters under preferential

issue of shares during the period from 1st Oct, 16 to 30th

Sept, 17.

• The promoter shareholding decreased from 0.19% as on

Sept 16 to 0.17% as on Sept 17 due to allotment of

shares to non-promoters.

• The shareholding of public institution increased from 1%

to 11.19% and that of public others decreased from

98.81% to 88.64% during the same period.

• The promoters have not pledged any shares.

Public - Institutional


Public - Others


Non-Promoter Non-

Public Shareholding 0.00 0.00 0.00

Source - NSE

MAJOR SHAREHOLDERS (AS ON 30TH SEPTEMBER ,2017)

S. No. Promoters Shareholding S. No. Public Shareholders Shareholding

1 Kivar Holdings Pvt Ltd 0.09% 1 QVT Mauritius West Fund 7.14%

2 Sudeesh Yezhuvath 0.07% 2 QVT Singapore Fund Pte Ltd 4.90%

3 Subhash Menon 0.01% 3 Uno Metals Ltd 3.77%

4 Tonbridge (Mauritius) Limited 3.19%

Source - NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares during FY 2016-17

Preferential issue to promoters No preferential issue of shares was made to the promoters during FY 2016-17.

Preferential issue to others The Company issued 5,50,94,999 of face value ₹10 each to Non-promoters during May,

2017 through preferential offering.

GDRs issued by the Company The Company did not issue any GDRs during last FY 2016-17.

Issue of ESOPs/Issue of shares other

than Preferential allotment

The Company did not issue any shares to the employees under its ESOP Scheme in FY

2016-17.

Source - Annual Report FY 16-17

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1 Implementation and customisation 11.88

2 Managed services 12.44

3 Support services 13.87

4 Sub-contracting services 57.69

Source - Annual Report FY 16-17




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Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover




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Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



7 | P A G E



𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year




8 | P A G E



DISCLAIMER

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