Business of Bartronics India
Bartronics India was incorporated in 1990 as a private limited company and converted to a public limited company in 1995. Bartronics started off developing and marketing bar codes and from thereon followed onto other related areas like Biometrics and RFID. The industry term for these technologies is AIDC, which stands for Automatic Identification and Data Capture, and these are used for inventory management, attendance recording, dispatch management etc. Bartronics has its offices in Hyderabad, Chennai, Coimbatore, Bangalore, Delhi, Jamshedpur, and Pune.
The products can be categorized into AIDC, Biometrics and RFID. There is a retail division, which focuses on providing Point of Sales services to the retail malls and superstores coming up in the country. The VAT regime is forcing many retailers to automate its processes and there is an opportunity for Bartronics in this field.
Bartronics has implemented projects in corporates like Whirlpool and Tata Steel and Vaishno Devi where it computerized the Yatra Management System and Tirumala Tirupati Devasthanam.
Financials
The turnover for the last fiscal was Rs.18.17 crores, which was up from Rs.12.58 crores in fiscal 2004. However in the three years prior to that the revenues declined and were at Rs.8.31 crores in 2003 down from Rs.8.44 crores in 2000-01.
The net profit was Rs.2.39 crores in the last fiscal up from Rs. Rs.1.35 crores in the fiscal before. The company has a fairly large interest expense at Rs.1.08 crores in the last fiscal and with respect to the profit after tax. The net margins of the company is 13.2% which can be improved quite a bit if the interest expense is reduced as this is a high expense in the total expense structure.
The total borrowings stand at Rs.7.32 crores, which equals a debt-equity ratio of 0.64. The EPS last fiscal was Rs.5.47 and the cash EPS was Rs.7.41.
Objects of the Issue
Bartronics has planned a total outlay of Rs.32.5 crores going forward which it plans to spend the majority in setting up a R & D Technology center. The main purpose of this is to commercialize various technologies into products and services and to reduce the input costs. Among the other expenses the company will repay a loan of Rs.4.14 crores from IDBI. Expand its geographical presence in India and set up new branches overseas as well.
Conclusion
Bartronics is offering its share between Rs. 63 and Rs.75 and the issue opens on 20th December and closes on 24th December. The company has been in existence for a fairly long period of time and the area of its core business is now expected to see some expansion with FDI in retail opening up and also with RFID becoming a popular technology and companies wanting to manage inventories etc. with it. To that extent it is one of those small, which have a good presence in a growing industry and are in a position to take advantage of any explosion in growth in that industry. One must have this stock in their portfolio if only a small percentage.
At a price of Rs.75 the company is asking for a P/E multiple of around 25, which is fairly high. This is after discounting for the new shares issued which when taken into consideration dilute the EPS to Rs.3.10. So although the company seems to be good taking a look into the valuation suggests that one should avoid investing here.
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section and their status. You can click on any of these to read more about them.
