Why Saksoft Shares Have Surged Over 50% In Just 10 Days

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Shares of Chennai-based IT company Saksoft were in spotlight today, rising as much as 17 per cent to Rs. 315 at its day’s high. The stock had surged 20 per cent yesterday.

Despite a weak broader market, investors have scooped up Saksoft shares since the IT company on December 15 announced the acquisition of Bengaluru-based DreamOrbit Softech, taking the overall gains to 54 per cent in just 10 sessions.

Speaking to NDTV Profit, Aditya Krishna, chairman and managing director of Saksoft, said DreamOrbit’s acquisition will help the Chennai-based company to expand its offerings in the digital transformation space, particularly in the area of IoT or Internet of Things.
Saksoft has been acquiring companies over the past few years. “A few years ago we acquired UK’s Acuma. Two years ago, we acquired a digital testing called 360Logica and now DreamOrbit. The IT market is changing rapidly. The deal sizes are getting smaller. There are a lot opportunities for specialised IT companies. If we can strengthen our capability in digital space, it bodes well for our future prospects,” said Mr Krishna.

Headquartered in Chennai, Saksoft has offices across the US, Europe and Asia, employing over 1,000 people. Mr Krishna said that Saksoft gets over 90 per cent of its revenues from US and UK geographies.

Mr Krishna said that Saksoft has invested heavily to boost its sales operations and with the new acquisitions, both revenues and margins are likely to get a boost in the future.

He also sees a lot of opportunities for Saksoft in the UK. “With Brexit, we see a lot of spending from the public sector space in the UK,” Mr Krishna said.

He sees Saksoft’s margins improving from 15 per cent-plus to 17 per cent over next few quarters.The dollar strength will also help Indian IT companies, he said.

On a consolidated basis, Saksoft had reported total revenues of Rs. 61 crore in the September quarter with net profit of around Rs. 5 crore.

Incorporated in 2010, DreamOrbit is a provider of specialist technology solutions for the logistics
& transportation enterprises and has offices in Bengaluru and the US. The company has 230 employees and works with 40 active customers. Almost all the revenues are offshore driven and it primarily to the US market with a small portion coming in from rest of the world. DreamOrbit has been recognised in Deloitte Technology Fast 50 India for the past three years.