Fundamental Analysis Of Bartronics India Ltd Marketing Essay

October 8, 2017 Marketing

Last twelvemonth Indian economic system showed good growing after the world-wide downswing in twelvemonth 2008-2009. India ‘s GDP growing was 7.2 % in twelvemonth 2009-2010 which was result of heavy investing by Government to maintain the economic system on path during planetary downswing. The Union Budget for 2010-11 was a displacement in financial policy and taking to change by reversal the budget shortage. Government is switching from exciting growing to keeping the growing impulse while shiping on a renewed way towards financial consolidation.

The domestic economic mentality for 2010 does look positive and expected to follow 2009 sort of GDP growing. Importantly, for that sustainable growing, the Services sector will hold to be a major subscriber. Domestic public presentation of service industry is nevertheless dependent on the public presentation of nucleus sectors and emerging new sectors.

Industry Analysis

Automatic Identification and Data Capture ( AIDC ) engineering Industry in India is all set to do its presence felt globally. There is a important part of India in the field of R & A ; D in AIDC, RFID, Smart Card, and Biometrics. The AIDC engineering covers six distinguishable groups of engineerings and services. They are Card Technologies, Data Communications Technologies, Bar Code Technologies, Radio Frequency Identification Technologies, Emerging Technologies, and Support and Supplies which serve the industry.

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These engineerings are applicable to about every sector of industry, commercialism and services where information is handled and demands to track and hint persons, stuffs and equipments. E.g. , Retail Industry, Shipping Industry, Logistics, Manufacturing etc.

AIDC industry is quickly traveling towards the usage of RFID in a figure of high value and high volume market section. The RFID market is expected to leap from $ 1.4 billion yearly to $ 6.1 billion in 2010. RFID and biometries solutions are turning at a CAGR of 50 % and are expected to hold an exponential growing with retail and fabricating growing in India. Bartronics holding the highest market portion and first mover advantage is expected to be the biggest donee. Furthermore states like Sri Lanka, Bangladesh, Dubai, Mauritius etc have booming industrial sector which contributes significantly to the GDP of their several states. These states provide enormous chance with good figure of big, medium and little sized industries in public and private sector are exporters of assortment of goods and services to developed states. These emerging markets showcase possible growing to AIDC market.

Over the last few old ages the consciousness of smart cards and its applications have bit by bit increased among the possible users in India. In the coming twelvemonth growing rate of banking and retail industry is expected to be high which brings possible market for smart card concern. Its usage in wellness attention and conveyance concern is expected to increase as more and more private participant enters into the concern. Recently project like UID from Government provides ample chance for the enlargement of smart card concern.

Industry Structure

Menace of Entry – menace is average because there are opportunities of planetary participant to come in in domestic market. However Bartronics have first mover advantage within India and besides have gained economic systems of graduated table as their concern has started booming outside India.

Rivalry – Competition is low in the industry and Bartronics is the market leader with first mover advantage.

Menaces of Substitute – technically there are no replacement for the merchandise ranges company is offering right now nevertheless they have diversified their merchandise portfolio and beef up their relationship with R & A ; D companies.

Dickering Power of Buyers – purchasers have low bargaining power.

Dickering Power of Suppliers – providers have high to medium dickering power as most of the cardinal natural stuff and hardware supplies are from external providers.

Company Analysis

Bartronics India Ltd. is a Hyderabad based company incorporated in 1990, provides solution in AIDC, Bar Coding, Smart Cards, RFID, Biometric, Point-of-sales engineerings etc. Company is market leader in domestic AIDC market and has important presence in universe market. Company has successfully provided solution to big turnkey undertakings in different AIDC engineerings.

Client Base

Bartronics ‘ cognition base, experience, accomplishment set, understanding of market will assist company to turn with its client. Tata Motors, Voltas, LML, IBM, Grasim, Genpact, Accenture, Oracle, Motorola, Deloitte, BHEL, BPCL, ITC, GM, NTPC, Dr. Reddy, Pantaloon, ONGC, Whirlpool, Reliance Group, Indian Railways are the large names Bartronics serve to.

Other than presence in India, Bartronics has two entirely owned subordinates in Singapore and USA which enabled them to function the foreign clients. Bartronics presence in turning markets will give advantage in increasing net income borders every bit good as to implement new advanced applications. Presence of company in US market will assist company entree to new engineerings to get the better of hazard of the engineering obsolesce.

Management Profile

Bartronics India is professionally managed private company. The diligence of the direction is apparent from the advancement and growing of company it has shown in last 18 old ages. They are able to do planetary presence in little clip. Their concern associates are spread over the universe and able to server large clients successfully. The direction is besides back uping R & A ; D and new fabricating unit to provide the turning demands of sectors like retails and fabrication.

Alliances

Bartronics India Ltd is invariably constructing confederations with industry leader in engineerings of smart cards and other related countries. Company has established strong relationship with ST Microelectronics, Infineon, M/s Muhlbouer, Oberthur Card Systems, Giesecke & A ; Devrient and Samsung in smart card infinite. In the AIDC infinite company has strengthen their relationship with Escorts Memory Systems, Intermec Corporation etc.

Gross Distribution

Its clear from the graph that Bartronics is doing inroads to abroad market particularly South East Asian countires like Singapore, Malaysia etc. To provide the turning demands of these market Bartronics have established entirely owned subsidaries in these parts.

Ratio Analysis

Company

Industry

P/E Ratio

7.45

13.59

D/E Ratio

0.83

Roe

17.5 %

16.11

P/BV

1.23

2.15

Market Cap

Rs 490 crores

Bartronics had P/E ratio of 14.7 in FY2009 which dropped to 7.45 in FY2010. The ground for bead in P/E ratio is diminution in portion monetary value and increased EPS. Company made solid operating net income of Rs 225.89 crores which is 77 % more than FY2008. Net net income stands Rs 65.79 crores with EPS value of Rs 19.32 per portion.

However if we look debt-equity ratio of FY2009 it was close to 1.8 which happened because of unbarred and secured loan of Rs 257.44 crores and Rs 292.18 crores severally. Company could payback this loan with solid net incomes in FY2009 cut downing debt-equity ratio to 0.8.

Stock Price Movement

Stock has performed good in get downing of FY2009 but been systematically underachieving from October 2009 onwards. Reasons could be the attraction of nucleus stocks which started executing as economic system showed some marks of rejoinder.

Why to Invest in Bartronics

Global RFID market is expected to turn by $ 6 bn by the terminal of this twelvemonth. even in India the RFID section is turning at a CAGR of 40 % , hence offers huge chances due to growing in retail sectors ( liberalisation of FDI investing is awaited ) , health care, telecom, banking and big information based execution undertakings by Central and State Governments. Eg. , BPL cards undertaking ( GoI ) , Bhamashah undertaking ( Rajasthan Govt. ) etc.

GoI has announced twosome of undertakings based on smart cards and biometries which is now being implemented at grass root degree ( like farm animal labeling ) giving Bartronics immense chance. Undertakings like National Unique Identity Card Project would hike the demand for smart cards in the state. To capture the demand for smart cards estimated at more than 150 million units per twelvemonth and turning at a CAGR of 48 % ( Frost & A ; Sullivan Report ) , BIL set up the first smart card fabrication works in India holding a capacity of 80 million units.

Company is now providing to international market, bagged orders from Singapore, US and other states.

Company besides bagged three patents form US Patent Office for RFID wristbands which can be used in health care, amusement industry etc.

Bartronics bagged ‘Aapke Dwar Project ‘ from Delhi Municipal Corporation. The undertaking aims puting up and running 2000 G2C booths in Delhi. Three gross watercourse has been identified from this undertaking, publicizing grosss, B2C services and dealing based gross from usage of Kiosks.

Concerns

Company operates in a concern where engineering alterations quickly doing engineering obsolete. Company might hold to compose off old engineering in that instance.

There is ever menace of new entrants in this concern.

Bartronics is be aftering to publish FCCBs to raise debt for ‘Aapke Dwar Project ‘ which might ensue in higher debt to equity ratio doing decrease in net incomes in future.

Recommendation

Buy or Hold

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