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CD Equisearch
D-Link (Buy)
CMP: ₹200.30
Target: ₹250
IT networking and storage market scraped the bottom last year — grew at the fastest pace in six years — precipitated by growing impetus on digitalisation. D-Link reckons that ramp up in IT spending by server message blocks (SMBs) would bolster its off take. Industrial Design Centre believes that “the increasing adoption of third platform, i.e., the blend of social media, mobility, big data and analytics and cloud computing in the operations and delivery aspect of enterprises will attract more investments in the wired as well wireless networking infrastructure.”
Individual users also throng D-Link’s stores. Demand for networking products rose as 3G/4G subscribers and broadband users rose manifold in the country. Continuing convergence of technologies, applications, service, security, inter-connectivity and multi-locational access has doubtless expanded the networking market. Central Government’s landmark initiatives of digitalising India and building dozens of smart cities would only fuel the fire.
No less critical is its proficiency to remain virtually debt free — funded the Team F1’s purchase consideration of ₹16.50 crore through equity. Volatility in forex rates though pose marginal risks for it imports finished goods worth over 50 per cent of sales.
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