Logix Microsystems Ltd is currently in its 13^thyear of operation.It is currently one of the fastest growing Indian software products company. Logix is aiming to virtually change the way the world shops for cars with its leading edge products, platforms and solutions targeted at Automobile Dealerships.

Consolidated Financial Highlights:

Equity (Face Value per share of Rs.10): Rs.10.09 crores*

Debt: Rs.11.10 crores

Market Cap:  Rs.350 crores

Promoter Holding: 25.96 % *

*Equity capital / promoter holding does not take into consideration effect of 31,00,000 equity shares allotted on September 27,07 at Rs.315 per share to Qualified institutional buyers.

Consolidated results for year ended March 31, 2007:

Revenue: Rs.32.49 crores

Operating profit: Rs.12.53 crores

Net Profit: Rs.8.97 crores

Consolidated results for Quarter ended June 30, 2007:

Revenue: Rs.10.06 crores (65% growth y-o-y)

Net Profit: Rs.3.78 crores (184% growth y-o-y)

Key Business Highlights:

 1] Logix Micro is a software products company with its izmocars brand product, solutions and platforms being primarily targeted at the Auto Retailing market in the US. These offer a comprehensive suite for lead generation, customer acquisition and customer retention.

2] Izmocar’s customer base in the US as of June was around 790.Izmocars was ranked No.2 in the Best 10 list of solutions providers for automotive dealers by Ward magazine. Leading automotive portals and dealer groups in the US including Yahoo! autos and Autonation, Inc use izmocar solutions.

3] In February 2007, Logix acquired Carsite.com which was a leading provider of online portals to media partners.Logix also acquired ReckonUp, a CRM product which has a web based application for automobile dealerships to improve operating efficiency and manage databases of current and prospective clients. Both the acquisitions were paid for in cash.

4] Logix also has recently set up one of the most modern studios to facilitate car photography for the company’s animation products as well as for manufacturer’s advertising campaigns. This studio has been set up at Long Beach, California and can photograph vehicles at 18Megapixel resolution.

Future prospects:

1] Overview: US car dealership revenue in 2006 was approximately USD 700 billion (Rs.28,00,000 crores).Dealers and manufacturers are however increasingly under pressure due to intense competition, fluctuating demand, shifting focus of customer loyalty, low profit margins & customers who are better informed about price, features etc due to the internet.

These challenges have prompted many Car retailers to embrace technology solutions in order to enable them to increase efficiency, reach out to customers, reduce lead time, manage databases and online marketing campaigns efficiently and most importantly to convert enquiries from prospects into sales. So, on an overall basis, Internet solutions are the platform which will enable car retailers attain an improved top line and bottom-line.

2] Market Size: As of 2006 end, there were 21,495 new car dealerships & 40,000 used car dealerships in the US and the total size for Internet solution products is estimated by the company to be around USD 1.2 Billion/annum.

3] Logix aims to become the No.1 provider of solutions for the Car retailing industry.It has increased the size of its sales-force in the US from 8 to 21.

4] Logix has also started a portal www.carazoo.com, as an online buying, selling guide for new, and used cars in India.

5] On the other side,Logix has wiped out its accumulated losses and from this year would have to pay MAT which will reduce net margins to the extent of the tax outgo.

Valuation:

Logix addresses a huge untapped, growing opportunity. Though the PE might appear expensive, considering the scalable nature of its product and the huge opportunity size, Logix should grow bottom-line at a CAGR of between 70-75% over the next 3-4 years and can give huge returns.