Buy Smartlink Network Systems; target of Rs 150: Equity99

Equity99’s report on Smartlink Network Systems

Smartlink Network Systems is pioneers in brining IT Networking to India. It was first company to start local manufacturing of IT Networking Products in India. It has excellent service & support network across India. Management has over two decades of experience in Manufacturing, Sales & Marketing in the IT Industry. It has strong pan-India network of regional and national distributors. The Company has a robust product portfolio and a nationwide reach through its network of national and regional distributors, resellers and system integrators. The Company’s business has been restructured into three wholly owned subsidiaries, each with a strong focus in their line of business. 1) DIGISOL Systems: The Company is engaged in marketing of networking products within the domain of Converged Communications Solutions under the brand name DIGISOL. 2) Synegra EMS: The electronics manufacturing Company with its own state-of-the-art manufacturing facilities committed to implementing the government’s Make in India mandate. 3) Telesmart SCS: The Structured Cabling products manufacturing Company with its own large scale stateof- the art manufacturing facilities committed to implementing the government’s Make in India mandate.

Outlook

It has posted very good set of nos led by operational performance. In Q3FY18 it has posted profit of Rs. 3.46 crs vs Rs. 1.41 crs. It’s 9MFY18 PAT was Rs. 8.82 crs vs Rs. 4.47 crs YoY. FY17 was PAT was just Rs. 5.17 crs, which is way higher in 9MFY18! Third quarter also marks a turnaround quarter for Smartlink as it has arrested loss of previous quarters on consolidated basis and post PAT of Rs.2.33 crs. Post buyback, equity base will again shrink, making it more attractive for long term investors. Looking at past financial record and management’s credibility we believe this stock is worth of Rs.150. Investors can BUY at current price.

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