Buy Take Solutions at Rs 56.4 and add on dips to Rs 48.5 - Rs 51 for a Targets Rs 74 - Rs 84 in next 3-4 quarters:: HDFC Securities

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Take Solutions Ltd (TSL), a mid-sized information technology company focuses on niche verticals like life sciences (LS) and supply
chain management (SCM). In LS, the company provides IT products and solutions through the drug development life cycle - right
from clinical trials to drug discovery, data management, regulatory compliance and analytics & business intelligence. TSL counts
seven of the top 10 global pharmaceutical companies as its clients. In SCM, its focus is on enterprise mobility, collaboration and
engineering
Triggers
 Highly niche player, domain knowledge is key differentiator
 Moving away from SCM as its is highly competitive – could affect revenues in near term, but would boost profitability
 Shareholding of Indian promoters increasing, enhances our confidence on the business
 Upgrading and Innovating new product offerings
 Recent FDA warnings to Indian Pharmaceutical companies pose an opportunity for TSL

Risks/Concerns
 Significant amount of Goodwill on books can hamper networth in future if impaired or written off
 Foreign exchange fluctuation as significant revenue from US
 High debtor days and any further debt taken for acquisition

Conclusion and Recommendation
The experienced promoter and management team of Take Solutions Ltd, its presence in niche business segments backed by
strong domain expertise, strong demand potential in the business space that the company operates in inspires confidence in this
company. At the current market price (of Rs 56.4) the company is trading at 14.5x its FY15E consolidated EPS of Rs 3.9 and 11x
its FY16E consolidated EPS of Rs 5.1. Investors could buy the stock at the CMP and add on declines to Rs.48.5-51 band (9.5-10x
FY16E EPS) for sequential targets of Rs 74-84 (14.5-16.5x FY16E EPS) for the next 3-4 quarters.

LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010654