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Thursday, July 30, 2009

Operators paradise,investors nightmare

1)Scripscan: Ajel Infotech Ltd

Story:Ajel Infotech Limited claims to be a provider of a complete range of information technology (IT) services like application development, business development and data warehousing, IT consulting, application management and so on. It claims that Cognizant Technology Solutions, Patni Computer Systems and Motorola are some of its clients. We haven’t had the time to check whether this claim is genuine but the financials of the company raise doubts. Certainly, with such high-profile clients, its turnover wouldn’t be just a few lakh rupees. In the March and September 2008 quarters, the company posted revenues of Rs1 lakh and Rs5 lakh, respectively, whereas in the June and December 2008 quarters, the revenues were Rs3 lakh each. In the March 2008 quarter, it posted an operating loss of Rs3 lakh, while in the June and December 2008 quarters, the company posted an operating loss of Rs1 lakh. Suddenly, in quarter-ended March 2009, it posted an operating profit of Rs20 lakh on revenues of Rs25 lakh. When the numbers are so funny, the stock price is bound to act funny too. This scrip was truly hot. Between 14 March 2008 and 8 July 2009, Ajel Infotech has surged a mind-boggling 1016%.

2)Scripscan:Bridge Securities Ltd

Story:We must admit that, even for hardened sceptics like us, this was a stunner. Here is a company which has negative sales! Yes, in the March, June, September and December 2008 quarters, it has posted negative sales of Rs2.27 crore, Rs5 lakh, Rs11 lakh and Rs12 lakh, respectively. And these happen to be audited numbers. If a company has revenues that are negative, there is hardly any question of positive bottom line. Bridge has had operating losses of Rs2.27 crore, Rs7 lakh, Rs12 lakh and Rs14 lakh, in the same period. In the quarter-ended March 2009, it suddenly posted revenue of Rs48 lakh, but it still booked a loss of Rs2 lakh. The main object of this Ahmedabad-based company is to invest, acquire, hold and deal in shares, stocks and debentures and also to do merchant banking, underwriting and share-broking. In spite of such dismal financials, this scrip has been gaining momentum since January 2009. Between 6 January 2009 and 8 July 2009, the stock has gained a humongous 464%.

3)Scripscan:Amrapali Industries Ltd

Story:This Ahmedabad-based stock and commodity-broking company is reporting eye-popping revenues. For the June, September and December quarters, revenues were Rs558.15 crore, Rs768.51 crore and Rs549.43 crore, respectively. But where is the money going? The profit margins are terrible. In the June, September and December 2008 quarters, the company posted an operating loss of Rs11 lakh and operating profit of Rs1 crore and Rs3.98 crore, respectively. The stock surged massively between 18 February 2009 and 8 July 2009, up 465%.

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