Hinduja Global Solutions Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are well covered by earnings (4.3x coverage).
• Hinduja Global Solutions's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Hinduja Global Solutions's dividend is above the markets top 25% of dividend payers in India (3.08%).

Cons

• Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

future

Pros

• Hinduja Global Solutions's earnings are expected to grow significantly at over 20% yearly.
• Hinduja Global Solutions's earnings growth is expected to exceed the India market average.
• Hinduja Global Solutions's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Hinduja Global Solutions's earnings are expected to exceed the low risk growth rate next year.
• Hinduja Global Solutions's revenue growth is expected to exceed the India market average.

Cons

• Hinduja Global Solutions's revenue is expected to grow by 7.6% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Hinduja Global Solutions is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Hinduja Global Solutions is profitable, therefore cash runway is not a concern.
• Hinduja Global Solutions is profitable, therefore cash runway is not a concern.
• Debt is well covered by operating cash flow (114.2%, greater than 20% of total debt).
• Debt is covered by short term assets, assets are 3.7x debt.
• Hinduja Global Solutions's cash and other short term assets cover its long term commitments.
• The level of debt compared to net worth has been reduced over the past 5 years (39.2% vs 28.2% today).
• Interest payments on debt are well covered by earnings (EBIT is 6.3x coverage).
• Hinduja Global Solutions's level of debt (28.2%) compared to net worth is satisfactory (less than 40%).

Cons

• High level of physical assets or inventory.

management

Pros

• The tenure for the Hinduja Global Solutions management team is about average.

Cons

• The average tenure for the Hinduja Global Solutions board of directors is less than 3 years, this suggests a new board.
• Partha's remuneration is higher than average for companies of similar size in India.
• Partha's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.

misc

Pros

Cons

• Hinduja Global Solutions is covered by less than 3 analysts.
• Hinduja Global Solutions has significant price volatility in the past 3 months.

past

Pros

• Hinduja Global Solutions's 1-year earnings growth exceeds its 5-year average (19.5% vs 7.2%)
• Hinduja Global Solutions's year on year earnings growth rate has been positive over the past 5 years.
• Hinduja Global Solutions's earnings growth has exceeded the IN IT industry average in the past year (19.5% vs 6%).

Cons

• Hinduja Global Solutions used its assets less efficiently than the IN IT industry average last year based on Return on Assets.
• Hinduja Global Solutions's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
• Hinduja Global Solutions has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).

value

Pros

• Hinduja Global Solutions's share price is below the future cash flow value, and at a moderate discount (> 20%).
• Hinduja Global Solutions's share price is below the future cash flow value, and at a substantial discount (> 40%).
• Hinduja Global Solutions is good value based on assets compared to the IN IT industry average.
• Hinduja Global Solutions is good value based on expected growth next year.
• Hinduja Global Solutions is good value based on earnings compared to the IN IT industry average.
• Hinduja Global Solutions is good value based on earnings compared to the India market.
• HGS outperformed the IT industry which returned -10.1% over the past year.
• HGS outperformed the Market in India which returned -14.5% over the past year.
• NSEI:HGS is up 12.3% outperforming the IT industry which returned 8.5% over the past month.
• NSEI:HGS is up 12.3% outperforming the market in India which returned 8% over the past month.

Cons