- Micro Technologies is products focused IT company that develops applications around mobile messaging and Internet.
- Over the years it has developed more than 80 products in various domains with micro vehicle black box, VBB, a vehicle security system, and micro home security system, HSS, messaging based security products being the most popular ones.
Robust order book
- The company's order book for its security products like the VBB and HSS has been growing over the past few quarters and currently it has orders to supply more than 0.35 million systems over the next eight quarters.
- I believe the order book would increase, going forward, as the company enters newer geographies and signs on more customers.
Valuations
- Micro Technologies has no direct comparables in the listed space. Therefore, we have valued this company on the average of FY07E PER of other small/mid cap IT companies.
- Based on this, I arrive at target price of Rs 412, an upside of 57.2% from the current level. The target price of Rs 412 is based on a PER of 14.4X that is the average FY07E PER of Indian IT companies with revenues of up to USD 100 million."
