Pyxis Technology Solutions

Score: Below Average

Krishnan Thiagarajan

GIVEN the low scale of operations and the inadequate experience in e-commerce, the public offer of Pyxis Technology Solutions may not offer adequate scope for appreciation.

Pyxis Technology Solutions is making a public offer at par to part-finance the expansion of its existing operations and proposed development centre at Kondapur near Hyderabad. As a part of this project, it proposes to develop e-commerce, e-business and web-based application programs and set up an overseas establishment in the US.

Although the potential for e-commerce growth is significant, the low scale of operations and the lack of experience in executing large scale projects may keep players such as Pyxis in the low-end of the e-commerce value chain. As the industry matures, the scope for sustained growth in operating profit margins may be limited.

In this backdrop, the revenue projections of Rs. 8 crores for the first year and Rs. 9.60 crores for the second seem optimistic. By extension, the projected per share earnings of Rs. 3.57 and Rs. 4.52 for the two years also appears to be on the high side. Considering these factors, this public offer may be given a ignored by investors. The offer closes on ***** and the lead manager is Ashika Credit Capital.