Blue Star Infotech's growth spree likely to continue

MUMBAI: The stock of Blue Star Infotech, a small cap IT player, has lost over 10% in the past one month following selling in the broader market during the period. It however retains over 28% gains on a horizon of the past three months. The gains track a turnaround in the company's financial performance over the past four quarters. Its management expects the good show to continue in the FY15 backed by a rejig in its business focus and a strong order flow.

After suffering from a deceleration in the net profit over the three years to FY12, the company realigned its focus on key operating verticals including travel, high-tech, and healthcare and acquired skills to be better able to cater to client needs in analytics and cloud technologies.

These initiatives have helped Blue Star Infotech to post an impressive growth in sales and profits. In the first nine months of FY14, its revenue of Rs 191.4 crore excluding foreign exchange adjustemnts has surpassed the FY13 full year revenue of Rs187 crore. Net profit too has improved to Rs 10.7 crore compared with Rs 5 crore by similar comparison.

"As revenue grew over the past six quarters, we were better able to rationalise fixed costs. We expect the overall momentum to continue given a strong order book across key verticals," said Sunil Bhatia, MD and CEO.