There are several hidden gems among the small cap companies in India. This technology company is engaged in business process management (BPM) and offers voiced and non voiced based services. This technology stock has generated 265% returns in the last 3 years and paying over 20% dividends in the last 2 years. It is the consistent paying dividend company in the last 10 years. In fact, this is trading at lowest P/E (compared to peers) due to recent stock market correction. In this article we would provide details of this less Multibagger Smallcap Stock that generated superior performance both in terms of share price appreciation and also high dividends.
Hinduja Global Solutions Limited
This is a less known Multibaggar small cap companies in India.
Hinduja Global Solutions Limited is engaged in the business of business process management (BPM). This company offers voice and non-voice based services such as contact center solutions and back office transaction processing across the globe.
Hinduja Global is a part of Hinduja Group, which has presence in Automotive, information Technology, media, entertainment & communications, infrastructure project, development, oil & specialty chemicals, power, real estate and healthcare. It employs around 200,000 people globally.
Financial Performance of the company
Company consolidated revenues increased from Rs 3,710 Crores in FY2017 to Rs 5,588 Crores in FY2021.
Its consolidated profits have increased from Rs 179 Crores in FY2017 to Rs 336 Crores in FY2021.
Latest Quarter Results of the company
In its recent quarterly results, its revenues declined from Rs 1,456 Crores for Qtr ending Dec-20 to Rs 802 Crores for Qtr ending Dec-21.
Its profits have increased from Rs 75 Crores for Qtr ending Dec-20 to Rs 163 Crores for the quarter ending Dec-21.
Dividend History of Hinduja Global Solutions Limited
Here is the dividend history in the last 12 years (financial years)
FY 2022 – Till Date – 18.6%
2021 – 25%
2020 – 21%
2019 – 12%
2018 – 10%
2017 – 12%
2016 – 31%
2015 – 25%
2014 – 24%
2013 – 45%
2012 – 39%
2011 – 38%
Share Price Performance of Hinduja Global Solutions
Here is the share price performance.
Last 1 year return – 95%
Last 3 year returns – 265% (1 Lac would have grown to 3.65 Lac)
Why should you invest in Hinduja Global Solutions Limited Shares?
Here are the major positive factors in this company.
1) Good revenue growth in the last 5 years.
2) Significant increase in margins in the last 5 years.
3) Recent Qtr results indicate good growth in the margins.
4) The company has high TTM EPS Growth.
5) Return on Capital Employed (RoCE) has been improving in the last 2 years.
6) Return on Equity (RoE) has been improving in the last 2 years.
7) Company has low debt.
8) Book Value per share is improving in the last 2 years.
9) Company has zero promoter pledge.
10) Consistent dividend paying company in the last 10 years. Dividend yield is over 20% in the last 2 years.
11) Share Price appreciated by 95% in last 1 year and 265% in the last 3 years. These nos would have been higher if there was no major correction in the last 2 months.
12) FPI / FIIs increased their share holding.
13) Company is trading at P/E of 8.1x which is the lowest compared to its peers.
You may also like: Multibaggar Midcap stocks tripled every 3 years
Negative or risk factors in Hinduja Global Solutions Limited
Here are the major negative factors.
1) Recent quarter results indicate a decline in the revenues compared to previous years.
2) Promoter reduced their shareholding in the last 3 years (67.32% in Dec-18 to 67.13% in Dec-21).
3) Company net cash flow is declining. It is not able to generate net cash.
4) Insider sold stocks in recent times.
Disclaimer: I do not hold any investments in this stock as of the day of writing the article, however, would invest based on the dips in coming days. I generally do this analysis for my personal investments and also post on this blog which might be useful for others too. Investment in direct stocks is a high risk. Investors should consult their financial advisor before investing in any of these stocks.
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Informative article; incidentally, dividend yield is given as 20% which may be incorrect; it is around 3.60% I suppose.
It has paid the following from Apr-21 to Dec-21
10-Aug-21 – Rs 7
20-Sep-21 – Rs 22
24-Nov-21 – Rs 10
17-Jan-22 – Rs 150
22-Feb-22 – Rs 28
Total till now – Rs 217
Its current share price is Rs 1,110. Dividend yield = 217/1110 = 19.5% (its share price has increased in the last 11 months, hence dividend yield should be computed based on the date of price, hence dividend would be higher compared to what I computed above)