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Multi Baggers

Aashish Tater

5.30 AM Jan 1st 1970

Smartlink Net

BSE ID : 532419     NSE ID : SMARTLINK

RECOMMENDED PRICE 57.60

PEAK FROM RECO 253.80 340.63%

CURRENT PRICE 173.45 Resource id #19

Smartlink Network Systems Ltd. is one of India's leading networking company. We recommend to buy at CMP with a target price of Rs 100-125.

Smartlink Network Systems

The smart bet for long term play.

NDA led government is looking for smart city and here is a proxy bet after we identified D-link which is already up 3x times.

About the company

Smartlink Network Systems Ltd. is one of India's leading networking company. It was established in the year 1993 to prop the Indian market in the field of Network Infrastructure. Pioneer in the field of Active networking, it offers an integrated value proposition from design and development

Why Smartlink a Smart Bet?

Debt Free Company having market cap of 170 crore and Liquid Investments of 280 odd crore as per latest balance sheetand 50 crore of cash. Meaning you are getting the Brand Digisol free of cost and additional 110 crores-140 crores of liquid equivalent

The company sold its Digi Link Business 3 years back but now the new forte will soon reap tremendous return. On net net basis investors with long term view has nothing to lose from here on as the threat or fear of seeing the fate end of new forte has eventually evened out.

We have valued the Digi-Sol business of smartlink for about 130 crore. Thus on total value front it is a company with intrinsic value of 400 crore+ available at 170 crore meaning target of 2.5x of current price. However the first target should be at around 100-125 before we initiate fresh view on Digi- business

Globally such net switch gear companies are trading at 20-22 PE on Cash Adjustment basis the value of the company works out to be at 150 a share including cash

Company paying dividend of 2 rupees thus making it a very attractive dividend yield.

Smartlink: The big trigger

Smartlink apart from cash is having no leverage, thus cash is available in surplus. Japan companies will be eyeing Indian Partners for smart city. Scope of business is so huge that it cannot be actually evaluated and we are talking about 100's of cities and thus opportunities will be multifold. Technology Hardpacks is what we have identified the two companies as D-Link and Smart Link. Though there is no more common-link between the two we believe just like D-link Performance from 28 to 100. Smartlink will soon be having the similar run-rate.

Schneider globally has been taking over such niche businesses. And there has been a past deal done by the company. So one cannot rule out the development.

The closest proxy is D-link doing 4 Rs. EPS and available at 25 PE and at dividend yield of 1 percent. Smartlink is available at 4 percent dividend yield.

Disclaimer: Aashish Tater is an equity analyst and investment adviser based in Kolkata, INDIA. At the time of writing this article, he, his firm and dependent family members have no position in the stocks mentioned above. The author invites readers to send him email and welcomes comments, feedback & queries at query@fortunewizard.com. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article.

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