COMPANY OVERVIEW:
CompuCom is a leading IT outsourcing company. It provides infrastructure management services, application services, systems integration and consulting services, as well as the procurement and management of hardware and software. CompuCom’s unique Integrated infrastructure Management (IIMTM) solution reduces costs, increases productivity and helps clients gain maximum value from information.

CompuCom has forged strategic relationships with many of the leading software publishers and hardware manufacturers, in order to most effectively meet our clients’ needs.

Latest Development:
Compucom Pre-School, education arm of Compucom Software, has recently crossed 50 pre-schools franchise enrolments across north India, confirms Prashun Gupta, Head, Pre-School and Corporate Communication, Compucom Software Ltd.
The company launched its pre-school franchise in June, 2010 and has plans to open 200 pre-school franchisees within the first year of its launch. Compucom is one of the fastest growing chains of pre-schools in north India and is planning to expand in other parts of India in coming quarters.
Company plans to take its count to 70 franchised pre-schools by March 2011.

Business Verticals:
Software Services- Provides IT solution. CompuCom also owns IT neer Inc, USA (wholly own subsidiary in US providing IT solution in US).
Learning Solution
Wind Power Generation- The Company had set up two wind power generation plants of 0.6 MW each at Jaisalmer (Rajasthan), two at Sikar (Rajasthan) of 0.6 MW each, and one of 0.8 MW at Krishna (Andhra Pradesh). The operation and maintenance of the wind power project has been out-sourced to Enercon India Ltd. The 0.8 MW wind Power Plant situated at Tumkur (Karnataka) has been sold to Enercon India Limited in March 2010 for Rs. 3.32 Crores since the generation from the said plant was very Low. During the current year the company has established a new 0.8 MW Plant at Krishna (Andhra Pradesh). The total Capital Outlay on the said plant was Rs. 4.30 Crores. Company is expecting the better generation from this Wind Power Plant.
Pre-School

INDUSTRY OUTLOOK:
Compucom is diversifying its business mix in order to de risk its business. We feel the business vertical that the company is entering into has good future. Company moving into pre-school business makes sense as education sector is poised to see robust growth. On other hand wind energy too is showing good potential.
Apart from its education and wind energy, its core business of IT solution and consultancy is also seeing good demand on back of global economic recovery.

INVESTMENT RATIONAL:
Pre-School segment to generate good business in the coming year.
Wind energy which is in very nascent stage but has the potential to contribute significantly in coming year.
IT sector doing well on back of global economic recovery.
Company is trading at just 9X to FY11E EPS of Rs 2.4.

Risk:
Adverse currency movement to hit the realization.
Slow down in global economy.

	NO. OF SHARE	% OF TOTAL
PROMOTERS	32853869	65.38%
INSTITUTION	12000	0.02%
GENERAL PUBLIC	17384131	34.600%
GRAND TOTAL	50250000	100.00%

	31/03/07	31/03/08	31/03/09	31/03/10
TOTAL INCOME	23.91	20.05	51.81	60.54
EXPENDITURE	-15.6	-11.94	-25.8	-27.31
PBDITA	8.31	8.11	26.01	33.23
DEPRECIATION	-2.01	-1.86	-11.34	-16.59
PBIT	6.3	6.25	14.67	16.64
INTEREST	-0.01	0	-1.67	-5.42
PBT	6.29	6.25	13	11.22
TAX	-0.5	-1.43	-4.14	-2.02
PAT	5.79	4.82	8.86	9.2
*Extra Ordinary Item is excluded from the calculation.

Key Highlights:
Total Income grew at CAGR of 36% to Rs 60.54 crore in the last four years.
PBDITA grew at CAGR of 58% to Rs 33.23 crore in the last four years.
PAT grew at CAGR of 16.5% to Rs 9.2 crore in the last four years.

	31/03/07	31/03/08	31/03/09	31/03/10
EPS	1.15223881	0.959204	1.76318408	1.830846
PBDITA MARGIN	34.7553325	40.44888	50.2026636	54.88933
NPM	24.2158093	24.0399	17.1009458	15.19656
INTEREST COVER	630	#DIV/0!	8.78443114	3.070111

Key Highlights:
EPS grew at CAGR of 16.5% in the last four years to Rs 1.2.
PBDITA margin improved from 34.7% in FY07 to 54.9% in FY10. This shows the improvement in the operational efficiency over the period of time.
NPM declined from 24.2% in FY07 to 15.2% in FY10. Rising tax liability was the major reason for the decline in the NPM.
Interest cover declined but is still at very comfortable level.

	Q2FY10	% CHANGE	Q2FY11
TOTAL INCOME	18.01	14.26985008	20.58
EXPENDITURE	-9.02		-10.31
PBDITA	8.99	14.23804227	10.27
DEPRECIATION	-4.5		-4.58
PBIT	4.49		5.69
INTEREST	-1.17		-1.3
PBT	3.32		4.39
TAX	-0.48		-1.06
PAT	2.84	17.25352113	3.33

Key Highlights:
Total Income rose by 14.3% in Q2FY11 to Rs 20.58 crore on YoY basis.
PBDITA moved up by 14.25% in Q2FY11 to Rs 10.27 on YoY basis.
PAT rose up by 17.25% in Q2FY11 to Rs 3.33 on YoY basis.

VALUATION &OUTLOOK:
At current market price of Rs 17.90, stock is trading at 9X to FY11E EPS of Rs 2.4. The industry average PE is 20. If we value the company at 12X that is at discount to industry average the fair value we arrive at is Rs 30.
So the fair value of the stock is Rs 30 on very conservative basis. The down side risk is limited.

CONCLUSION:
We ask our investor to buy the stock in staggered manner ie: in small quantity on every dip. This is advised because the market is near its high. Investor should buy the stock with investment time horizon of at least 10-12 months.