Our Pick of the week for this week CSS Technergy Ltd provided 17% returns during this week. Below is the research report that we sent to our paid members.

CSS Technergy Ltd (Bse Code: 590050) :  

CSS Technergy Ltd (Bse Code: 590050) Founded in 1986 and incorporated in 1994, CS has been delivering business differentiation solutions to its clients across Utilities, e-Governance, Document Management and Engineering Services domains. It has iterated through multiple layers of learning through the years and is geared for the next wave of innovation in its service domains. CSS has over 25 years of experience in delivering custom ITES to the leading organizations across the world. We apply a slew of matured processes, an array of home-grown software tools, customizable software products and employ experienced and skilled technical resources in delivering the best IT services and solutions. CSS leverages its extensive functional experience to add a competitive edge and reduce costs for its clients. CS is a public limited company headquartered at Hyderabad, India. It has site offices at multiple locations within India and branch offices overseas.

CSS also does end-to-end meter-to-cash solutions and adoption of firmware upgrades in Spot Billing Machines which are still being used on a large scale due to their high ROI and high efficiency. CSS serves more than 20 million consumers across India through its utility services division in 8 states. CSS is serving customers like FedeX, Fujitsu, PSEB, Wipro, GE, CMC, Cap Gemini D E Shaw, MESCOM, Mahavitaran etc.

CSS expertise summary:

E-governance project planning and implementation.

End to End document management.

One of India's largest Utility IT Services company offering services to several DISCOMs

Serving 10 top utilities in the country

CSS stores, manages and maintains close to 10 million customer data on the servers in a secure manner

CSS is an empanelled member of PFC for bothMDASP and GSP for R-APDRP programs of Govt

Empanelled with UID-Aadhaar in the highest T2,F4 category for all-India capability

CSS has its own suite of customer-proven products for each of the vertical it operates in. These solutions are used on a regular basis at CS project locations and at client deployment areas. Its suite of products includes:EBAS, MetTecaa, DMSol,Loyaltrack

So far, performance of CSS has been lackluster. However, in view of certain developments, CSS has much better and brighter future prospects. As company is T2F4 level categorized by UIDAI, it has bagged contract for 22 districts covering the states of Bihar, West Bengal, Andhra Pradesh and Orissa. Company can cover the whole of eligible numbers with in these 22 districts and additionally also bid for other locations with different registrars.  From this new business, company is eligible to capture 50 million nos of UID Project. THIS PROJECT CAN LEAD TO 200 CRORE REVENUES TO CSS IN 3 YEARS. Company has already started implementation of this prestigious project which is being done through Own Assets as well as Outsourcing. For implementation of this project, company needs to spend approx 3 lac for each work-station and total capex will be 600 lacs for 200 workstations. To raise money for this project, CSS may make preferential offer of equity shares in near future (that is why, equity for next year has been shown as 7 crores.  Above estimates have been arrived at only considering orders in hand. If CSS manages to capture more orders from UID, company's performance can be spectacular in coming years. Its current market cap is just 14 crores which is really considering:

FINANCIALS:

FINANCIAL PERFORMANCE
	9month ended	12month ended
	31.12.2010	31.03.2010
Income	8.28	11.82
Depreciation	1.61	1.92
Net Profit	0.52	0.13
Equity	-	5.64
Reserves	-	14.37
Cash Profit	2.13	2.05
Book Value Rs	-	35.5
FUTURE OUTLOOK:
	2010-11E	2011-12E	2012-13E
Total Income	12.5	48	65
Profit after Tax	0.75	4.5	7
Equity	5.64	7	7
EPS Rs	1.32	6.4	10

Book Value of the company is Rs 35.50

Scrip is available at 3.80xFY12E Eps

Scrip is trading at 2.45xFY12E Eps

Share Holding Pattern:

Promoters holds 47.35%,

Corporate and HNI holds a whopping 16.89%, Below are the deails.

Sl. No.	Name of the Shareholder	No. of Shares	Shares as % of Total No. of Shares
1	R Keerthi	99,354	1.76
2	M Sarvothama Reddy	158,407	2.81
3	R Prathishta	194,117	3.44
4	Sasidhar Purushottaman	107,100	1.90
5	Rajendra Naniwadekar	64,035	1.14
6	Sharad Kanayalal Shah	76,336	1.35
7	Varsha Sharad Shah	72,216	1.28
8	Dipak Kanayalal Shah	70,000	1.24
9	Anurupa Chunduri	110,716	1.96
	Total	952,281	16.89

Leaving general public 35.76%,(20,15,252  Shares to public).

In near future, company's performance will witness huge improvement and share price too can climb sharply. Scrip at Cmp appears risk-free.  Floating stock is low.