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Netsol announces 1HFY12 results – Alfalah Securities Limited

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by January 31, 2012 Brokerage

Karachi: Netsol Technologies Ltd announced 1HFY12 results reporting Profit after tax of PKR 212.14 million (EPS: PKR 2.44) declining by 48.2% YoY where the revenues declined by 5.7% to PKR 917.8 million.

According to Alfalah Securities Limited, the gross profit margins remained at 50.8% in 1HFY12 as against 63.3% last year due to rising costs of doing business. On quarterly basis, Netsol announced Profit after tax of PKR 190 million (EPS: PKR 2.36) lower by 2%YoY and while significantly up by 760%QoQ basis. NETSOL is a software company with more than 80% of the revenues arising from exports making it positively exposed to Rupee depreciation and favourable tax treatment. However, despite being hedged by currency devaluation, the company has been facing a decline in business due to world recession. Although, it is trading at FY12E P/E multiple of 1.77x however, due to high volatility in profitability and bleak outlook, Alfalah Securities Limited maintains a cautious stance on the stock.


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