Capstocks Equity Research

Company Analysis
18th Oct 2015
_____________________________________________________________________________________

Capstocks Research Team

Reiterate Buy :
Target
:
Holding Period :

Conviction Ideas - 188

SQS BFSI

` 805
` 920
3 Months

COMPANY OVERVIEW:
SQS India BFSI Limited formerly known as Thinksoft Global Services Ltd is an
independent Business Assurance and Testing Specialist, working exclusively with financial
sector clients in the USA, Europe, Asia Pacific, Middle East and India. With a unique business
model and a track record of over 14 million person hours, the company has over 900 strong
delivery work force, with centers in Chennai and Mumbai, supported by local offices in
Bengaluru, New York, London, Dubai, Singapore, Brussels and Sydney. The company helps
clients reduce software product life cycle costs and develop business ready software' within
compressed timelines, through intense domain focus, structured software testing methodologies,
offshore delivery, and test automation expertise. The company also has the distinction of
maintaining high standards in execution, coverage, quality and confidentiality. The company is
ISO 9001:2008 and ISO 27001:2013 certified, both its Chennai Test centers are SSAE 16/ISAE
3402 compliant and one of the centers is PCI:DSS compliant. The company has now become
part of the SQS Group, the world's leading specialist in software quality. SQS position and
expertise as the market leader are the result of over 30 years of successful consultancy.
BUSINESS:
SQS BFSI is a pure-play software testing company with key focus verticals includes
Banking, Cards and Payments, Insurance and Treasury & Capital. Banking segment constitutes
half of the total revenues followed by cards and payments category. The company helps clients
reduce software product life cycle costs and develop business ready software' within
compressed timelines, through intense domain focus, structured software testing methodologies,
offshore delivery, and test automation expertise. They also have the distinction of maintaining
high standards in execution, coverage, quality and confidentiality. Their financial software
testing services have helped system integrators and product development companies to achieve
near defect-free rollouts of software products such as PRIME, TS2, VisionPLUS, Oracle
FLEXCUBE, T24, Equation, B@ncs24, CS Eximbills, FinnOne, Kondor+, Pan Credit, TS2,
Siebel, Newton, Kastle, Genius, Premia, MIDAS and ClarityQ. On region wise Europe
contributes 48% and Asia 36% of total business.
FY 2013

FY 2014

FY 2015

161.4

194.4

214.2

Net Profit Cr.

19.4

30.0

21.6

EPS Rs.

18.2

27.7

20.8

Book Value Rs.

87.1

105.4

96.3

24

FINANCIAL HIGHLIGHTS:
Net Sales Cr.

Dividend Rs.

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Capstocks Equity Research

Company Analysis
18th Oct 2015
_____________________________________________________________________________________
INVESTMENT RATIONALE:
SQS BFSI is one the leading software testing company. Post acquisition of majority
stake by SQS, Germany in SQS BFSI, company fortune started changing. The integration of the
company with parent Group is successfully completed and benefit started accruing. In recent
FY16 Q2 results, company has posted decent 17% increases in revenue when compared to last
year, similarly profit has shown good improvement. Company has added 66 employees in Q2
which gives confidence on future prospects and also debtors days have come down. We expect
company to post EPS of around 32 for FY 16 and 40 for FY 17. Since our last buy report on the
company, the stock price has rallied significantly in spite of this good growth prospects, decent
dividend distribution, competent management makes SQS BFSI still a buy considering current
volatile market condition.
SHAREHOLDING PATTERN
AS ON Sep 2015

PROMOTERS
Foreign - Bodies Corporate 54.48
INSTITUTIONS
Mutual Funds
FII

3.37
1.04

Bodies Corporate

4.97

Public and Others

36.14

STOCKS DETAILS
NSE SYMBOL

.
SQSBFSI

FACE VALUE Rs.

10

EPS Rs.

20.8

BOOK VALUE Rs.

96.3

MARKET PRICE Rs.

805

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Capstocks Equity Research

Company Analysis
18th Oct 2015
_____________________________________________________________________________________

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Capstocks Equity Research

Company Analysis
18th Oct 2015
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P revious Conviction Ideas:

Sl.
No.

Company Name

185
186
185
184
183
182
181
180
179
178
177
176
175
174
173
172
171
170
169
168
167
166
165
164
163
162
161
160
159
158
157
156
155
154
153
152

Tinplate
Intellect Design
Canfin Homes
Jamna Auto
IL&FS Investment
PNB Gilts
Tourism Finance Corp
Inox Leisure
Garware Wallropes
Sonata Software
Biocon
FDC
Dewan Housing
JK Tyre
Zensar Tech
Ceat
DCB Bank
Jamna Auto
Accelya Kale
Cholamandalam Fin
FDC
Man Industries
Canfin Homes
Navin Fluorine
Man Infraconst
Garware Wallropes
Canfin Homes
Emerging Stocks
Claris Life
Infinite Computers
TV Today
JM Financial
SQS BFSI
SKF India
Nilkamal
Tata Motors

Recommendation
Date & Price
` 69.7
4-Nov-15

Target
Price
` 80

CMP Status
66.45

28-Oct-15

` 215

` 265

237.5 Target Achieved

21-Oct-15

` 1002

` 1150

958.7

14-Oct-15

` 238

` 260

221.1

7-Oct-15

` 18.4

` 23

17.95

30-Sep-15

` 27

` 32

27.3

23-Sep-15

` 47

` 59

55.3

Target Achieved

16-Sep-15

` 227

` 265

222

Target Achieved

9-Sep-15

` 281

` 345

344.1 Target Achieved

2-Sep-15

` 138

` 160

159.2 Target Achieved

19-Aug-15

` 480

` 560

450.5

12-Aug-15

` 190

` 220

230.5 Target Achieved

5-Aug-15

` 266

` 295

210.8

29-Jul-15

` 108

` 132

97.1

22-Jul-15

` 795

` 920

1037

Target Achieved

15-Jul-15

` 720

` 830

1043

Target Achieved

8-Jul-15

` 130

` 160

81.5

1-Jul-15

` 205

` 260

221.1 Target Achieved

24-Jun-15

` 1040

` 1150

947.8 Target Achieved

10-Jun-15

` 600

` 690

603.4 Target Achieved

3-Jun-15

` 153

` 178

230.5 Target Achieved

27-May-15

` 67

` 80

91.95 Target Achieved

13-May-15

` 695

` 790

958.7 Target Achieved

29-Apr-15

`837

` 950

1948

Target Achieved

15-Apr-15

` 46

` 52

37

Target Achieved

8-Apr-15

` 188

` 218

344.1 Target Achieved

1-Apr-15

` 615

` 720

958.7 Target Achieved

25-Mar-15

Na
` 350

NA

18-Mar-15

Na
` 279

11-Mar-15

` 222

` 290

213.6 Target Achieved

25-Feb-15

` 245

` 290

243.5 Target Achieved

18-Feb-15

` 55

` 64

42.25

11-Feb-15

` 574

` 645

808.3 Target Achieved

28-Jan-15

` 1434

` 1650

1210

21-Jan-15

` 464

` 545

994.1 Target Achieved

206

Target Achieved

` 523
` 590
14-Jan-15
406.3 Target Achieved
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Capstocks Equity Research

Company Analysis
18th Oct 2015
_____________________________________________________________________________________
151 Castrol India
` 521
` 590
7-Jan-15
439.6
150 Federal Bank
` 73
` 85
25-Dec-14
55.55

149
148
147
146
145
144
143
142
141
140
139
138
137
136
135
134
133
132
131
130
129
128
127
126
125
124
123
122
121
120
119
118
117
116
115
114

Zensar Tech
JM Financials
Canfin Homes
Bharat Electronics
Tata Coffee
Centum
PNB Gilts
Sanghi Industries
Canfin Homes
LG Balakrishnan
Castrol India
Garware Wallropes
V-Mart
Amararaja Batteries
Gujarat Alkalies
Hindustan Zinc
Aarti Industries
Nilkamal
Zensar Tech
JK Tyre
M&M Financials
JMC Projects
LG Balakrishnan
Amararaja Batteries
Atul
Canfin Homes
TVS Srichakra
Styrolution ABS
SKF India
Cox & Kings
Crompton Greaves
LG Balakrishnan
TV Today
Accelya Kale
NIIT Tech
JK Tyre

18-Dec-14

` 585

` 690

1037

11-Dec-14

` 50

` 57

42.25 Target Achieved

3-Dec-14

` 500

` 575

958.7 Target Achieved

26-Nov-14

` 766

` 883

1231

20-Nov-14

` 98

` 115

91.8

12-Nov-14

` 558

` 675

599.5 Target Achieved

5-Nov-14

` 25.3

` 32

27.3

Target Achieved

15-Oct-14

` 61

` 75

62.9

Target Achieved

8-Oct-14

` 452

` 520

958.7 Target Achieved

1-Oct-14

` 704

` 790

464.6 Target Achieved

24-Sep-14

` 434

` 490

439.6 Target Achieved

10-Sep-14

` 180

` 218

344.1 Target Achieved

27-Aug-14

` 432

` 490

442.2 Target Achieved

13-Aug-14

` 532

` 625

895

30-Jul-14

` 201

` 245

162.8

23-Jul-14

` 169

` 195

140.9

16-Jul-14

` 204

` 245

503.7 Target Achieved

2-Jul-14

` 392

` 475

994.1 Target Achieved

25-Jun-14

` 415

` 476

1037

Target Achieved

11-Jun-14

` 56

` 65

97.1

Target Achieved

28-May-14

` 304

` 352

231.4

21-May-14

` 149

` 185

220.3 Target Achieved

7-May-14

` 233

` 263

464.6 Target Achieved

30-Apr-14

` 422

` 490

895

Target Achieved

23-Apr-14

` 520

` 590

1652

Target Achieved

16-Apr-14

` 240

` 280

958.7 Target Achieved

2-Apr-14

` 304

` 345

2712

25-Mar-14

` 475

` 555

732.6 Target Achieved

19-Mar-14

` 795

` 890

1210

Target Achieved

12-Mar-14

` 152

` 175

249

Target Achieved

5-Mar-14

` 134

` 150

173.7 Target Achieved

19-Feb-14

` 163

` 187

464.6 Target Achieved

12-Feb-14

` 113

` 140

243.5 Target Achieved

29-Jan-14

` 750

` 845

947.8 Target Achieved

22-Jan-14

` 413

` 475

598

Target Achieved

15-Jan-14

` 33.4

` 38.8

97.1

Target Achieved

Target Achieved

Target Achieved

Target Achieved

Target Achieved

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Capstocks Equity Research

Company Analysis
18th Oct 2015
_____________________________________________________________________________________
` 63
` 72
113 Gujarat Pipavav
8-Jan-14
166.3 Target Achieved
112 NIIT Ltd
` 28
` 36
1-Jan-13
91.65 Target Achieved

111
110
109
108
107
106
105
104
103
102
101
99
98
97
96
95
94
93
92
91
90
89
88
87
86
85
84
83
82
81
79
78
76
75
74
73

V-Mart
Atul
FDC
TVS Motor
Gujrat Gas
Cyient
Tata Steel
VST Tillers
Avanti Feeds
Amararaja Batteries
Alembic Pharma
Gujrat Gas
Atul
Bajaj Corp
Biocon
Indraprastha Gas
Accelya Kale
Avanti Feeds
Hindalco
Pfizer
Avanti Feeds
Amararaja Batteries
Sundaram Finance
NDTV
JK Tyre
Jammu & Kashmir
JK Lakshmi
Bajaj Corp
ITC
GIPCL
Yes bank
Chettinad Cement
ABirla Nuvo
JB Chemicals
Vijaya Bank
NMDC

26-Dec-13

` 220

` 260

442.2 Target Achieved

4-Dec-13

` 430

` 475

1652

27-Nov-13

` 101

` 118

230.5 Target Achieved

20-Nov-13

` 50.3

` 58

286.2 Target Achieved

13-Nov-13

` 289

` 330

481.9 Target Achieved

6-Nov-13

` 250

` 285

489.8 Target Achieved

23-Oct-13

` 335

` 390

225.9 Target Achieved

9-Oct-13

` 460

` 536

1366

Target Achieved

3-Oct-13

` 225

` 258

2643

Target Achieved

18-Sep-13

` 297

` 345

895

Target Achieved

11-Sep-13

` 141

` 162

658.6 Target Achieved

21-Aug-13

` 207

` 237

481.9 Target Achieved

14-Aug-13

` 313

` 360

1652

7-Aug-13

` 245

` 276

415.1 Target Achieved

31-Jul-13

` 318

` 375

450.5 Target Achieved

17-Jul-13

` 305

` 345

460

10-Jul-13

` 557

` 625

947.8 Target Achieved

3-Jul-13

` 160

` 185

2643

26-Jun-13

` 97

` 112

76.55 Target Achieved

12-Jun-13

` 1061

` 1220

2390

Target Achieved

5-Jun-13

` 130

` 155

2643

Target Achieved

29-May-13

` 274

` 305

895

Target Achieved

22-May-13

` 560

` 650

1490

Target Achieved

15-May-13

` 93

` 110

87

Target Achieved

9-May-13

` 23.2

` 27

97.1

Target Achieved

2-May-13

` 137

` 152

84.85 Target Achieved

17-Apr-13

` 90

` 104

344.5 Target Achieved

3-Apr-13

` 243

` 275

415.1 Target Achieved

13-Mar-13

` 300

` 330

347.9 Target Achieved

6-Mar-13

` 71

` 82

78.3

13-Feb-13

` 522

` 575

723.1 Target Achieved

6-Feb-13

` 910

` 1090

710

Booked Loss

23-Jan-13

` 1170

` 1290

1984

Target Achieved

16-Jan-13

` 90

` 104

267.1 Target Achieved

9-Jan-13

` 66

` 77

33.7

2-Jan-13

` 170

` 196

91.65 Target Achieved

Target Achieved

Target Achieved

Target Achieved
Target Achieved

Target Achieved

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Capstocks Equity Research

Company Analysis
18th Oct 2015
_____________________________________________________________________________________
72 HIL Limited
` 490
` 575
26-Dec-12
587.2 Target Achieved
71 Tata Motor DVR
` 174
` 195
19-Dec-12
290.3 Target Achieved

70
69
68
67
66
65
64
63
62
61
60
58
57
56
55
54
53
52
51
49
48
47
46
45
44
43
42
41
40
39
38
37

36
35
34
33

LIC Housing
Gujarat Alkalies
Texmaco Rail
Bajaj Auto
Sundaram Finance
IDFC*
Karur Vysya Bank
JB Chemicals
Cairn India
Zensar Tech
Bajaj Corp
JK Tyre
Accelya Kale Solution
Goodricke Group
Orient Paper
Ceat
Venkys
Tata Sponge *
Cera Sanitaryware
Mangalam Cement
Alembic Pharma
IDFC*
FDC
Force Motor
Chettinad Cement
Automobile Corp
Everest Industries
Goodricke Group
Amararaja Batteries
HSIL Limited
Goodyear Tyres
Gateway Distriparks
Sundaram Finance
Raymond
HIL Limited
Cera Sanitaryware

12-Dec-12

` 274

` 314

458.9 Target Achieved

3-Dec-12

` 141

` 171

162.8 Target Achieved

29-Nov-12

` 64

` 74

132.6 Target Achieved

22-Nov-12

` 1830

` 2050

2343

Target Achieved

15-Nov-12

` 480

` 575

1490

Target Achieved

31-Oct-12

` 161

` 180

52.4

Target Achieved

10-Oct-12

` 433

` 495

424.2 Target Achieved

3-Oct-12

` 75

` 90

267.1 Target Achieved

26-Sep-12

` 335

` 375

134.7 Target Achieved

12-Sep-12

` 270

` 305

1037

5-Sep-12

` 185

` 220

415.1 Target Achieved

22-Aug-12

` 23.2

` 25.6

97.1

16-Aug-12

` 168

` 192

947.8 Target Achieved

8-Aug-12

` 145

` 175

241

1-Aug-12

` 64*

` 78

24.05 Target Achieved

25-Jul-12

` 96

` 114

1043

18-Jul-12

` 458

` 520

453.5 Target Achieved

11-Jul-12

` 339

` 375

446.2 Target Achieved

4-Jul-12

` 287

` 330

1872

20-Jun-12

` 122

` 152

192.1 Target Achieved

13-Jun-12

` 52

` 62

658.6 Target Achieved

6-Jun-12

` 126

` 153

52.4

30-May-12

` 81

` 95

230.5 Target Achieved

23-May-12

` 458

` 550

3380

Target Achieved

16-May-12

` 700

` 875

710

Target Achieved

9-May-12

` 350

` 425

408

Target Achieved

2-May-12

` 160

` 205

280.2 Target Achieved

24-Apr-12

` 155

` 175

241

Target Achieved

18-Apr-12

` 158

` 188

895

Target Achieved

11-Apr-12

` 165

` 205

273.4 Target Achieved

4-Apr-12

` 365

` 440

579

28-Mar-12

` 150

` 180

334.9 Target Achieved

21-Mar-12

` 320

` 363

1490

14-Mar-12

` 400

` 460

407.8 Target Achieved

29-Feb-12

` 345

` 420

587.2 Target Achieved

22-Feb-12

` 219

` 260

1872

Target Achieved
Target Achieved
Target Achieved
Target Achieved

Target Achieved

Target Achieved

Target Achieved
Target Achieved

Target Achieved

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Capstocks Equity Research

Company Analysis
18th Oct 2015
_____________________________________________________________________________________
Zensar Tech
` 181 ` 215
32
15-Feb-12
1037 Target Achieved
NIIT Tech
` 240 ` 310
31
9-Feb-12
598
Target Achieved

Fag Bearings
Escorts
Oracle Financial
Tata Motors
Zensar Tech
Manglore chemicals
Amararaja Batteries
LIC Housing
Raymond
Grindwell Norton
FDC
Biocon
United Phosphorus
GIPCL
Ashok Leyland
Gateway Distriparks
Balmer Lawrie
Wyeth
LG Balakrishnan
CRISIL
ITC
Sundaram Finance
Yes Bank
Goodyear Tyres
IDFC*
City Union Bank
Styrolution ABS
Indraprastha Gas
GMDC
Amararaja Batteries

30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1

1-Feb-12

` 1199

` 1430

3929

25-Jan-12

` 84

` 102

159.1 Target Achieved

18-Jan-12

` 2020

` 2280

3871

11-Jan-12

` 205

` 240

406.3 Target Achieved

5-Jan-12

` 135

` 165

1037

30-Nov-11

` 33

` 40

40.65 Target Achieved

17-Nov-11

` 112

` 130

895

2-Nov-11

` 235

` 275

458.9 Target Achieved

20-Oct-11

` 356

` 415

407.8 Target Achieved

12-Oct-11

` 235

` 268

728

5-Oct-11

` 89

` 106

230.5 Target Achieved

28-Sep-11

` 345

` 385

450.5 Target Achieved

21-Sep-11

` 155

` 179

445.1 Target Achieved

14-Sep-11

` 76

` 86

78.3

Target Achieved

7-Sep-11

` 27

` 32

91.7

Target Achieved

24-Aug-11

` 130

` 150

334.9 Target Achieved

17-Aug-11

` 377

` 428

558.3 Target Achieved

10-Aug-11

` 1016

` 1150

NA

3-Aug-11

` 145

` 170

464.6 Target Achieved

27-Jul-11

` 870

` 960

1951

20-Jul-11

` 205

` 226

347.9 Target Achieved

13-Jul-11

` 276

` 320

1490

6-Jul-11

` 325

` 374

723.1 Target Achieved

29-Jun-11

` 322

` 396

579

Target Achieved

22-Jun-11

` 122

` 154

52.4

Target Achieved

15-Jun-11

` 45

` 54

86.2

Target Achieved

8-Jun-11

` 595

` 690

732.6 Target Achieved

1-Jun-11

` 342

` 409

460

Target Achieved

25-May-11

` 138

` 180

76.1

Target Achieved

18-May-11

` 104

` 128

895

Target Achieved

Target Achieved
Target Achieved
Target Achieved
Target Achieved

Target Achieved

Target Achieved
Target Achieved
Target Achieved

Tata Sponge adjusted buy price post open offer is 285

Model Portfolio was given in Conviction Idea 50 , 59 ,77 ,80,100,160 ,*6, *47, 55
Demerged, Wyeth merged with Pfizer
Some stocks have achieved target after the holding period mentioned in our report
Capstocks & Securities (India) Pvt. Ltd
Tel: 0471-4093361 | E-mail: research@capstocks.com ,www.capstocks.com

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Capstocks Equity Research

Company Analysis
18th Oct 2015
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****************************************************************************************************************

Disclaimer:
Capstocks & Securities (India) Pvt. Ltd (hereinafter referred to as Capstocks) is a registered Member of National
Stock Exchange of India Limited, Bombay Stock Exchange Limited and MCX Stock Exchange Limited. Capstocks
registered as a Depository Participant with CDSL, Portfolio Manager with SEBI, and Mutual Fund Distributor with
AMFI. Capstocks has made an application with SEBI for registering as a Research Entity in terms of SEBI
(Research Analyst) Regulations, 2014.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of
any investment decision. Nothing in this document should be construed as investment or financial advice. Each
recipient of this document should make such investigations as they deem necessary to arrive at an independent
evaluation of an investment in the securities of the companies referred to in this document (including the merits and
risks involved), and should consult their own advisors to determine the merits and risks of such an investment.
The information in this document has been printed on the basis of publicly available information, internal data and
other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be
relied on as such, as this document is for general guidance only. Capstocks or any of its affiliates/ group companies
shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in
the information contained in this report.
Disclosure:
I, Karthic Babu T.R.S, hereby certify that all of the views expressed in this research report accurately reflect my
views about the subject issuer(s) or securities. I also certify that no part of our compensation was, is, or will be
directly or indirectly related to the specific recommendation(s) or view(s) in this report.
Research Analyst or his/her relative or Capstocks does not have financial interest in the subject company. Also
Research Analyst or his relative or Capstocks or its Associate do not have beneficial ownership of 1% or more in the
subject company at the end of the month immediately preceding the date of publication of the Research Report.
Further Research Analyst or his relative or Capstocks or its associate does not have any material conflict of interest.
Capstocks / Analyst has not served as an officer, director or employee of company covered by Analyst and has not
been engaged in market making activity of the company covered by Analyst.
Any holding in stock Yes
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