Zooming up Stock Price

The share price of this IT company in the product space has moved almost seven times from around Rs.50 to around Rs. 350 from November 2004 till May 2005. To that extent investors who were invested in the company during this period have already made the gains that could be made in the stock. Further buying in the counter should only be done when the market as a whole corrects and the share prices moves down along with the broad indices.

Business of the Company

The company is in business of products in the IT domain. They create products for the Capital Markets, Forex Markets, Commodities, Derivatives and Treasury.
FTIL's first product was ODIN (Open Dealer Integrated Network). This was a front office solution targeted at the brokers of the BSE and NSE. This product integrated all the aspects of placing a trade and also real time risk management system, which enables to brokers to expand their footprint and increase their reach considerably.

The company has rolled out new versions of the product thereby obsolescing the older versions and improving the products and making the money out of incremental efforts in terms of the product functionalities.

FTIL also offers an Internet Trading Platform, which is called FT Engines. Their customers for this product include players who offer their customers Internet trading options, players such as ICICI Direct and Kotak Securities.

Apart from equities the company is also present in the Forex market with its product called FX Direct. This is a product that enables online inter bank trading of Forex and so far around 30 banks have signed for this. This product has actually been developed by IBS Forex Ltd which is a company floated by FITL.
The company has also entered into a joint venture with the Dubai Government to set up DGCX viz. Dubai Gold and Commodities Exchange. This is expected to get operationalised in 2005.

Apart from these the company also has a STP (Straight Through Processing) gate services. SEBI has mandated STP and wants every transaction and post trade contract go through an STP environment. This has really made the STP Gate Services of FTIL take off and currently 70% of Indian Fund managers are signed on for the particular service.

The Road Ahead

The company is operating in a segment, which is poised to do well. This is because IT as a sector has got tremendous growth potential and the customers of the company, which are financial institutions, are also in a phase of growth. A growing economy results in the development of the financial markets and the development in turn fuels the growth of the economy. The company has also proved its capabilities by making products that have been endorsed by a large number of big corporate clients who have the financial muscle to look elsewhere for solutions as well.

Having made its mark and now looking towards foreign markets the company is poised for high growth. However since the stock has just seen a sudden spurt it would be wise to wait for the stock to go down a little bit before investing in it.