3 High Growth Microcap Tech Co's I'm tracking closely!

Summary

This video offers an insightful analysis of three promising companies in the Indian e-commerce sector: Unicommerce, OAC, and CNIS. Unicommerce, despite its high P/E ratio of 166 and price-to-sale ratio of 20.9, holds a significant market share in India's dropship business, with strong growth projections. OAC and CNIS also show potential with expected organic growth rates of 20-25% and 20-30%, respectively. The presenter encourages viewers to share their thoughts on these companies and expresses interest in delving deeper into their risk and growth profiles.

Takeaways

• 😀 The Indian stock market is experiencing a healthy correction after a 14-15 month rally, which is seen as a buying opportunity for long-term investors.
• 📉 Micro-cap stocks offer high growth potential but are highly volatile, requiring investors to understand their risk appetite before investing.
• 💡 The first company discussed is Oi Technology, focusing on digital transformation for enterprises, particularly in cloud computing and automation.
• 🔗 Oi Technology is a tier-one Microsoft cloud service provider with 23 years of partnership, leveraging Microsoft's products for its business.
• 📈 Oi Technology has shown consistent revenue growth and is completely debt-free, generating strong cash flow from operations.
• 🗺️ The second company, CNS Tech, specializes in geospatial services and technology solutions, with significant growth potential in its GIS segment.
• 📊 CNS Tech has been growing its sales consistently, but its margins are volatile, which requires careful monitoring for sustainability.
• 🛒 The third company, Unicommerce, provides end-to-end e-commerce services and is well-positioned to benefit from the growing D2C market.
• 💰 Unicommerce operates on a SaaS model, allowing for faster profitability growth as sales increase, despite currently high P/S ratios.
• 📉 While all three companies have strong growth prospects, investors should remain cautious of valuation levels, especially after recent price surges.

Q & A

What is the main focus of the video?

The video focuses on analyzing three promising micro-cap tech companies in India, discussing their growth prospects and current valuations.

What are the three companies being analyzed?

The three companies analyzed are Ola Technology, CNS (C Tech), and Unicommerce.

What growth rate does Ola Technology expect?

Ola Technology has an organic growth guidance of 20-25%.

How has Unicommerce performed in terms of revenue growth?

Unicommerce has seen a significant increase in revenue, tripling in the past few years.

What is the valuation concern for Unicommerce?

Unicommerce currently has a very high P/E ratio of 166, which raises concerns about its valuation amidst rapid growth.

What indicates the management strength of the companies discussed?

Each company has a strong management team with relevant expertise and a proven track record, which is crucial for navigating the competitive landscape.

Why is the price-to-sales ratio important for high-growth companies?

For high-growth companies, the price-to-sales ratio provides a better valuation metric than P/E because it reflects revenue generation potential rather than earnings, which may be volatile.

What should investors consider when investing in micro-cap stocks?

Investors should consider the company's growth potential, management effectiveness, current valuation metrics, and overall market conditions before making investment decisions.

What is the market cap of CNS (C Tech)?

CNS (C Tech) has a market cap of ₹1,150 Cr.

What is the significance of the IPO price for Unicommerce?

Unicommerce's IPO price of ₹108 is significant as it serves as a reference point for assessing the company's current valuation after its stock price more than doubled upon listing.