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Prosoft Systems Limited |
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Executive Summary |
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| Business | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company was originally incorporated as a Private Limited Company in July 1993
and was subsequently converted into Public. The company became a Franchisee of ISCT
Information Technologies Ltd. and operated various coaching centers in Bangalore. The Company is presently engaged in corporate training, placements, software development and software education in the field of ERP, E-Commerce, database solutions, GIS etc. The clients of the Company include 12 Technologies, Kshema Technologies, Tata Consultancy Services and Ericsson Communication Pvt. Ltd. Corporate Training The Company has been training software engineers from reputed organizations in the IT industry, Apart from offering training in the fields of application and systems, the Company has also conducted programs in ERP packages. Software Development The Company has been developing software in small and medium size projects. Manpower Consultancy The Company has been catering to the need of the industry in manpower by placing qualified software professionals. Software Education The Company has been providing training to software professionals. The Company was carrying on this activity under the franchise agreement with ISCT Information Technologies Limited under the brand name of ISCT. Mr. Mohan Kumar K.N, an Electronics Engineer has about 7 years experience in the field of Computer and software education, training and development. He also holds a diploma in Computer Science from International School of Computer Technology. After completing his diploma, he started the partnership business - Professional Computers, in the field of Computer Education. In 1993 he promoted Prosoft Systems Pvt. Ltd. He has produced and directed many special documentary films for Doordarshan, Bangalore. The Company proposes to diversify into Medical Transcription (MT hereafter) by establishing two production units at Bangalore and Baroda. It also plans to service other medical transcription units from its editing facility. |
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| Industry Scenario | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IT enabled services are emerging as one of the hottest growth segments. Today, IT enabled services (Call Centers, Air-ticketing, pay-roll accounting, Medical & Legal Transcription, Insurance Claims processing, Back-office Data processing, Content Development etc,) employ more than 25,000 people and generate about Rs. 1000 crore every year. With the recent development in the Telecom infrastructure, this industry is now poised for multi-fold growth and is expected to create one million additional jobs and earn an annual revenue of Rs. 81,000 crore by year 2008. The growth of the Web is stimulating the growth of IT-enabled services by allowing companies to centralize services and/or operations at the globally most optimal location while providing access to customers anywhere in the world. Providing services through the Web is also significantly reducing transaction costs. To illustrate, an industrial Company can reduce its transaction costs by 40% by providing customer services through the Internet rather than through call centers. According to McKinsey & Co., IT-enabled services are expected to grow 15-fold by 2008, providing vast opportunities for Indian players. Currently, call centers and animation are the largest opportunities, accounting for 85% of all IT-enabled services. By 2008, the overall market for IT-enabled services will amount to approximately $142 billion.
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| Financials | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Till FY99,
the major source of income for the company was from training. Its only from the period
ending December '99, the income from software development activities started flowing in.
The term loan taken from KSFC was cleared by February 2000.
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| Project Analysis | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The project has been appraised by Vijay Bank, which has extended a term loan of Rs.125 lakhs. |
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| Critical Success Factors | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| So far, the company's business focus has been training and manpower placements. Now the company is diversifying into medical transcription. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Competitive Position | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The company
is into low end businesses like training and manpower placements of the software industry.
There are innumerable such companies doing similar business. While the company may be able
to carry on in the short run, in order to survive in the long run, the company has to
identify stronger areas of business. |
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| Market Scenario | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The primary market had witnessed a boom at the beginning of this year when many companies came out with public issues at high premiums. The market has however now learnt to identify the good and high growth companies from the entire lot. While companies offering at par are still sailing through, the ones charging a premium need to be more careful. Companies like SIP Technologies have called off their IPOs due to poor response. |
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| Recommendation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The company
is basically into IT training. And the projects the company has are at a very low end of
the market segment. Moreover, the company is making its foray into Medical Transcription,
which needs high accuracy which the strong companies like C-Bay Systems and Medquest could
not meet. Adding to the woes are the current market conditions. Investors are advised to
be cautious. |
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