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Monday, May 11, 2009

IKF Technologies Ltd:-Future outlook/potential/recent news/buy or sell ikf technlogies?

Scripscan:IKF Technologies Ltd

Story:Whenever the markets are on a boil, there has to be some froth. As the frenzy increases, investors are ready to buy almost any story. And if that story comes in the guise of an "undiscovered" winner, whose fundamentals are strong, and valuations weak - then it provides additional fuel to the burning desire of those who do not want to be "left out".And when investors are so gullible as to buy into any half-plausible tale, it brings out the creative best in many companies and their stock market advisors. This is also the season where many "undiscovered" stories routinely take up costly advertising space in this newspaper - hoping to attract attention, usually with the help of some astonishing results or announcements.A few days ago, I spotted results of Hyderabad based IKF Technologies .It never performed in the last 5 years,bottomline went nowhere but topline surmounted to 28crs in 08 from nothing in 04.Now these figures are truly dramatic. Unfortunately, neither the quarterly results nor the company website provides much clarity on where these revenues came from. All they've said in the quarterly advertisement is that they are tapping the immense potential in bio-fuels (meant to replace petrol or diesel) by investing in plantations over several thousands hectares in some countries. Now that is a huge amount of land! But I have no idea what they're planning to plant, nor where the money to do this will come from.Wondering how BPO and bio-fuel fit together got me motivated enough to check out their web site, the BSE and several other sources. And the story only got curiouser.According to the company web site, their main business is in technology solutions. These services are not defined in great detail, but generically described as product development services, IT services, technology consulting, etc. In fact their web site has just four visible pages! Maybe the fact that they were getting nowhere with their software business has nudged them towards the two divergent, but currently "hot" businesses of BPO and bio-fuel?The company was originally set up in February 2000 under the name of IKF Software.Com Ltd, and went public almost immediately. And yes, I almost forgot, shortly after the dotcom frenzy subsided, they changed their name to IKF Technologies. Adding to the noise around the stock is a multitude of recent announcements (they sure seem to have had a lot of board meetings in the last few months!)Check that out folks.From all this, one can gather that there is a lot of action within the company. However, the public announcements and disclosures are completely inadequate in terms of telling investors what is truly going on. I've spent a few hours searching for detailed information, but all that is available are press releases or announcements of grand plans.Ultimately, a real story will have some truth behind it.Offlate there has been lot of noises too of IKF being the next big multibagger.Analyst fraternity,self proclaimed investments gurus are pocketing lakhs of shares of the counter.Promoters increased some stake but still the holding pattern is pegged at a pretty low comfort zone for me.Every serious company provides justifications and backup data, from billing rates to employees to costs to client acquisitions and the like - which help provide credibility.But when grandiose announcements, a sudden spurt in trading volumes and prominent ads in the papers all coincide, and that too in the absence of plausible explanations - then any investor or analyst would be justified in being extremely skeptical.I know I am.

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