Analysis of Midcap Software Stocks

Did an evaluation for Geodesic Information Systems(NSE: GEOINFO) as a part of the "Business Analysis and Valuation Course".

Still to achieve its fair value of 240(as per my estimates).Attached table gives the relative comparison of 4 companies in the same sector. A closer looks also reveals Cranes Software as an attractive buy.

For now, Buy GEOINFO with price target of Rs. 240.

Here are the outcome of the relative valuations:

				Summary of PE Ratios				Summary of P/BV Ratios
	FY			2006	2007E	2008E		2006	2007E	2008E
	Geodesic			30.0	17.1	11.8		6.4	3.7	2.6
	Cranes Software			17.2	10.1	6.0		3.7	2.2	1.3
	Subex Azure			57.4	37.1	23.9		5.2	3.4	2.2
	Financial Technologies			109.1	54.6	27.3		49.8	24.9	12.5
	Average of Comparative Companies Chosen			53.4	29.7	17.3		16.3	8.5	4.6
	Average of companies excluding FT			34.9	21.4	13.9		5.1	3.1	2.0
				Summary of P/CFPS Ratios				Summary of EV/EBITDA
	FY			2006	2007E	2008E		2006
	Geodesic			13.4	7.7	5.3		22.3
	Cranes Software			13.4	7.9	4.7		10.0
	Subex Azure			19.9	12.8	8.3		16.8
	Financial Technologies			170.8	85.4	42.7		119.9
	Average of Comparative Companies Chosen			54.4	28.5	15.2		42.3
	Average of companies excluding FT			15.6	9.5	6.1		16.4