Sometimes opportunities are so tiny that it is easily missed, So here I am, with another stock discussion, and this time it’s very very tiny one.
Before I begin, let me remind you about the disclaimer that this is purely a discussion, not a recommendation. Stocks are volatile by nature, exercise your judgment to invest in them. Use only surplus money as there are chances of permanent capital loss in micro caps.
So let’s delve into the stock of this week called ITCONS E-Solutions Ltd.
For those of you, who like, here is the Annual report, and for others’s let start the discussion in our specified format.
What does it do?
Products/Services: Providing hiring/staffing services of skilled and unskilled workforce to companies in India. Payroll services and IT solutions.
Sales and Profit growth: Phenomenal (for the years in which data is available)
ROCE is quite good at 31%
Pledging: Zero!
Debt: Zero!
Dividend: nil (in line with size and aspiration of company)
What’s the trigger?
Apart from the phenomenal growth opportunity in the contingent workforce sector, here are some other key triggers.
Quality of clients :
Wipro Technologies, Wipro Infotech, Central Warehousing Corporation (CWC), Municipal Corporation agencies of Maharashtra Govt., Nokia Siemens, L&T Infotech, MSource, HCL Services, HCL Comnet, HCL Technologies, HCL Infotech, Genpact, Mindtree, TATA Tele Services, Radico Khaitan, Sak soft, Motherson Sumi, Amdocs, ICICI Bank, Sopra Steria, Path Infotech, Agreeya, Aricent, TVS Electronics, Xebia, Hitachi, CMS, Collabera Technologies, Magic Software, IF& FS Technologies, Team computers, SBSC, Hughes Systique.
Move toward non-permanent workforce hiring.
Recent client wins:
Paytm, PhonePe, Indian Army, Swiggy, NTT.
Risk?
The obvious risk of investing in micro-cap stocks is loss of capital with the economic downturn risk, which is not in our control. Let’s see a few others…
There was a significant jump in stock price recently due to back-to-back order wins.
Price fluctuations can be more since it was listed only in 2023.
Hiring slowdown in IT companies can adversely impact the performance of the company.
Hope you enjoyed the discussion, and will try to bring other stock in the coming weeks.
Till then, keep investing.