Geometric Ltd – Analysis

Geometric Ltd reported weak Q4FY08 numbers, with revenue growing by just 2.0% QoQ to Rs1,265m, while net profit declined by 31.4% QoQ to Rs47m. EBITDA grew 10% QoQ, while operating margin expanded 90bps to 12.5%. PAT margin declined 180bps to 3.7% of revenue, driven down under pressure from losses under other income. Other income reported a loss of Rs11m (as compared to a profit of Rs26m last quarter) and Rs203m for the entire fiscal.

We are underweight on Midcap IT stocks in India and we are recommending investors to Book Profits and exit the sector and look at companies with domestic business model such as Infrastructure, Telecom, Retail etc.