3i INFOTECH-INTERESTING IT PLAY

3i Infotech promoted by the ICICI group is a interesting mid cap IT player.It is both a products as well as a services company.It is involved in Banking,Manufacturing,Retail and Insurance verticals.Products and services approximately contribute equal amount to the turnover.The company has an interesting portfolio of products in the areas of Banking,Insurance,Anti-Money laundering areas (remember for this product I Flex recently bought a US company for Rs.2000 crores).

The company has given a guidance for a growth of 25-30% for this financial year.For the current year the company will end up with a turnover in excess of Rs.500 crores and a eps of Rs.13 to Rs.14 Rupees.On the current price of Rs.185 the share is traded at a p/e of 14 times forward.Assuming a conservative growth rate of 20% for the next two years the share looks undervalued.

Product companies typically get higher valuation than the services ones of intelluctual property value enshrined in the company.Good parentage,steady growth shown by the company,reasonable valuations and a good outlook for technology makes this company attractive for investment with a 3-5 year perspective.