Northgate Technologies
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=440
Printed Date: 19/Apr/2024 at 5:02am
Topic: Northgate Technologies
Posted By: go4lalit
Subject: Northgate Technologies
Date Posted: 01/Oct/2006 at 6:22pm
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Northgate Technologies (CMP 560) is a global player in Online Advertising and VOIP market. It has recently released VOIP based product called "Global7". The oppotunity is huge.
Reliance Growth fund has got 7% stake in this company.
Please share more info & your view anout this potential MuntiBagger.
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Replies:
Posted By: s_praharaj
Date Posted: 01/Oct/2006 at 8:51pm
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Is it a new company or changed the name.
Do u have any more details about the company like its client list etc.
------------- Shashi Praharaj |
Posted By: Ajith
Date Posted: 01/Oct/2006 at 9:06pm
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Their website -www.northgatetech.com
This company would be good only if they have something really unique to offer. ------------- Ajith |
Posted By: Ajith
Date Posted: 01/Oct/2006 at 9:25pm
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I read in some blogs that their subsidiary Axil pays 25 dollars for putting their banner on their website.Everything on the website looks appealing but one has to be really sure about the business model and promoters before investing. ------------- Ajith |
Posted By: go4lalit
Date Posted: 01/Oct/2006 at 8:52am
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I collected the following info about this company:
Northgate Technologies ( http://www.northgatetech.com/ - http://www.northgatetech.com/ ) is a Hyderabad based company, has mainly two products:
1. Globe7 ( http://www.globe7.com/ - http://www.globe7.com/ ) : Globe7 is the world's first (Patent Pending) VoIP powered Internet TV. Globe7 users can make Free International Calls (Partnered through Verizon) accross the globe by Watching Free Videos in Globe7. They already have more than 20 million downloads of this free product.
2. Axill - Online Advertising Exchange ( http://axill.com/ - http://axill.com/ ): Northgate has been defining Media advertisement through Axill Inc., a 100% subsidiary which has established itself as one of the largest and ultimate junction for advertisers and publishers. Axill.com currently has got more than 2400 Publishers and over a 1000 Advertisers.
Axill patent pending technology enables to deliver Ads in real time to the Globe7 where they can be tracked from end to end to give the best ROI to the advertisers.
The concept looks very interesting & the opportunity can be huge. We neeed to watch this company very closely.
The things that are unclear are the sustainablity of their business model and the credibility of the management.
The company in their last Board Meeting has already decided for Private Placement of equities to UBS, Macquarie Bank and some other FIIs at the rate of 497/- per share. Reliance Gowth Fund has already got 7% stake in the company in the month of June.
http://www.moneycontrol.com/india/news/business/venkatsmeenavallinorthgatetechnologies/preferentialallotmentbyoct25northgatetechnologies/market/stocks/article/242355 - MoneyControl.com has published interview with the CEO about their plans.
Please share your views about this company/opportunity.
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Posted By: manishdave
Date Posted: 01/Oct/2006 at 9:11am
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really interesting business. What is market cap and current revenue?
Onc concern though. If they allow videos, could there be IP violation? if that is the case in long run company can face many litigations. If promotors are honest and they have some revenue, business can command very high p/e.
I posted demand for Bandwidth as next big thing few days back. Services from companies like this will create huge additional demand for BW.
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Posted By: s_praharaj
Date Posted: 02/Oct/2006 at 2:35pm
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Thanx Ajith, for the reply This company looks interesting.
As Lalit wrote earlier they have mainly two lines of business.
Globe7 and Axill, one provides VOIP and other is a online advertising excahnge.
Both are in niche segment and has most of their revenues from US.
I am not very sure about the prospects of VOIP business, but their on-line advertising business will definitely pick up.
In the first quarter of 2006-2007, though the company shows an increased net profit and EPS, the results are not good.
Expenditure decreased by 50%,
Hefty other income of 10.82m
Depreciation is reduced by 50%
Provision for tax is only 20% of the earlier quarter.
The sales has also considerably decreased.
I could not get any reason for the decrease in sales.
There are a lot many plus points about the company.
1. The stock price is constantly increasing for last 18 months.150 to 560.
2. MFs and FIIs are constantly acquring stocks with high premiul. Recently some FIIs have taken stake at 497.28 per share, increasing equity from 18 to 23 crores.
3. Though stock option scheme is there the company is very conservative in allotting stock options.Only 6,00,000 shares allotted under stock option so far.
4.The company is having negligible debt.
5.There are few competitors for their product.
6. Business od on-line advertising through internet is defintely to go up.
7.The remunerations paid to directors incluing charman are moderate, not very high like others in the same segment.
There are a few areas which requires a little more probing.
1. Two of the directors resigned recently due to personal reasons.
2. Quality of Management, I could not get the qualification and experience of the Chairman and other directors.
None the less , the company should be watchedd closely.
If Basant can give his opinion about the stock, it can throw more light on the quality of investment.
THanx everybody. ------------- Shashi Praharaj |
Posted By: basant
Date Posted: 02/Oct/2006 at 4:06pm
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I have been reading with great interest about this company (on the forum) but I would not be able to provide any opinion since I am totally ignorant of what this company does. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Ajith
Date Posted: 02/Oct/2006 at 4:59pm
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What Mr. Basant says is correct.
The only thing that draws me to this company is the industry they are operating in -online advertising which is expected to boom along with technology to capture worthwhile eyeballs.But I would give any stock a very very low PE unless I am sure it has really found a niche which will give it a sustainable leadership.Perhaps Buffet's joke about failing the candidate who attempted to value an internet company is valid here because neither the shape of technology to come nor future/existing competition is known except the fact that its all likely to be disruptive?
All the same we can investigate further-maybe?
------------- Ajith |
Posted By: go4lalit
Date Posted: 08/Nov/2006 at 10:39am
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Northgate has already moved up 60%+ (from 560/- to 900+) from the point we have started the discussion.
Anything cooking here?
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Posted By: BubbleVision
Date Posted: 08/Nov/2006 at 10:59am
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Lalit, with this stock you have proved that This is a Market of Stocks and NOT a stock market.
Congrats.... ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 09/Nov/2006 at 1:39pm
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Congrats. Let's hope it does more then that. At least that is what I could make from your first post. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deveshkayal
Date Posted: 28/Apr/2007 at 11:45am
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Plz have a look at this company....
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Northgate Technologies(CMP: 851)
Globe7 – A Web 2.0 Application Axill – Online Advertising Exchange Globe7 is the World’s first (patent pending) VoIP powered Internet TV. Globe7 users can make Free International Calls across the Globe by watching Free Videos on Globe7. Milestones
Axill, a New Jersey based fastest growing Online Advertising Exchange, is creating awareness to action from fortune companies to small internet startups. Milestones
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Reliance Growth Fund and the "media" man Prateek Agrawal's ABN Amro Future Leaders is holding this stock in their portfolio.Thats the sole reason behind this post. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: basant
Date Posted: 29/Apr/2007 at 12:06pm
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They have been holding it for 2 years now maybe some tech guy can help us with this company. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deveshkayal
Date Posted: 29/Apr/2007 at 1:12pm
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Being in the internet space makes it an attractive stock to discuss. Lycos is very popular in the US. Skype too is popular. TEDies based in US,UK may have some idea on its products. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: omshivaya
Date Posted: 29/Apr/2007 at 3:59am
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Northgate was first introduced at TED by reetesh I think. From what I know, it is a very well run company and reetesh in fact had a target of a 10-bagger by 2010 I think. Someone may do a search and see what all he wrote on this one. Their software Globe 7 has a leadership in its niche offering, globally. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: deveshkayal
Date Posted: 29/Apr/2007 at 10:37am
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This is a solid company.Good to see Lalit started discussion on this stock so early.I am posting a mail which i received from a guy called Raju V :
- Has business in offering a licensed software (Axill) to track ROI for advts on the web. I understand Axill is a very popular software used by eBay, walmart etc in the usa. For every additional customer, there is no implementation costs but there is a good revenue. In business terms, near Zero mraginal costs but 100% marginal revenues. A huge scale up opportunity at negligible costs. Also internet advt is a high growth industry.
- Has business in VOIP free telephones ( Globe 7 ). Skype is the market leader with more than 100 Million users and Globe7 is no 2 with 21 Million users. Skype was acquired by eBay at 50 dolar per customer when it was small. Apply the same yardstick, the business value of 21M users is 1 Trillion dollars which is Rs 50,00,000 Crores while the current Market cap is Rs 1,500 Cr. Assuming this no is exaggereated, even then the price has a long way to go from 960.
- Also allows video sharing streaming along with Globe 7. The business leader in this segment is Youtube which got acquired by Google for 1.6 Billion dollars. Which is Rs 8,000 cr. Again compare its current market cap which is just Rs 1,500 Cr. 5 times more value from 960.
- Already, Yahoo has expressed interest in acquiring Northgate. pls click here to read news.
http://www.dnaindia.com/report.asp?NewsID=1062753 - http://www.dnaindia.com/report ----------------------------------------------------------------------------------------------
Thanks Omji for giving me a hint on search.Reetesh is holding this stock.Where is he nowadays.... ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: basant
Date Posted: 29/Apr/2007 at 10:45am
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He will be coming to calcutta this week. He really introduced us to good emerging ideas like Northgate and IOL broadband amongst a few!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deveshkayal
Date Posted: 29/Apr/2007 at 10:53am
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Would be great to see him back in action!!! ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: omshivaya
Date Posted: 29/Apr/2007 at 11:54am
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Yups he was really very analytical and knowledgable, like you Devesh ji. Dunno where he is now. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: go4lalit
Date Posted: 30/Apr/2007 at 12:42pm
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Thanks Devesh for waking up this thread again.... I was following Northgate when it was in 500 levels, Then it suddenly jumped to 900+ levels. I missed the bus and also stopped following. The best thing about this company is size of opportunity and scalability. This kind of companied either become big (that is what we want) or acquried or they become zero.
Have any of the TED members used their product? They will be able to provide feedback about their product. Also the popularity of their product?
Management seems OK with doing the right things.
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Posted By: go4lalit
Date Posted: 30/Apr/2007 at 1:57pm
| What about trying Axill (advertising exchange) for TED website? |
Posted By: Rinku
Date Posted: 30/Apr/2007 at 8:08pm
| bahut majedar company lagte hai bhai..Correction me pick pick pick |
Posted By: Rinku
Date Posted: 30/Apr/2007 at 8:12pm
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Future trigger:
The company will go in for a valuation for Globe7 in March next year, apart from applying for a VoIP license in India. Northgate Technologies, listed on the Indian bourses, it could perhaps also go in for an international listing one year down the line, he said.
Source DNA and http://www.theequitydesk.com/forum/member_profile.asp?PF=133&FID=38 - deveshkayal
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Posted By: Rinku
Date Posted: 30/Apr/2007 at 8:36pm
| Hyderabad April 29 The Hyderabad-based Northgate Technologies has announced that its subsidiary Globe7 (HK) Ltd, that offers Internet portal-based global communications, has launched two new USB phones into the global VoIPmarket. These phones are packaged with an offer which includes one year free unlimited call facility to 25 designated countries. |
Posted By: Rinku
Date Posted: 30/Apr/2007 at 8:38pm
| Their site http://www.bharatstudent.com - http://www.bharatstudent.com |
Posted By: go4lalit
Date Posted: 30/Apr/2007 at 9:48pm
| This web site looks interesting. It is owned by Axill Europe Ltd, a subsidiary of Northgate. |
Posted By: pirate
Date Posted: 11/May/2007 at 12:44pm
| the 3rd qtr result was disappointing and the fourth qtr result would be disappointing too due to new product launch and marketing expense.. one should wait no dought company business model is good. |
Posted By: pirate
Date Posted: 14/May/2007 at 12:08pm
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http://www.northgatetech.com/newsroom/greaterchina.html -
NORTHGATE EYES TAKEOVER IN GREATER CHINA.....
http://www.northgatetech.com/newsroom/greaterchina.html - http://www.northgatetech.com/newsroom/greaterchina.html |
Posted By: deveshkayal
Date Posted: 23/May/2007 at 10:16am
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Bharatstudent.com, a social utility and network portal, will hire around 2,000 students as interns to report campus happenings and guide aspiring students trying for admissions in their schools and colleges, during this fiscal. Bharatstudent.com is a web property of Axill Europe Limited, the UK-based wholly-owned subsidiary of Northgate Technologies Limited.
“We received 18,000 applications from 2,800 institutions for the ‘earn part time’ section on our portal in the last two months. We have short-listed 400 students from across the country and 100 Indians studying abroad to work as interns with us,” Vishnu Vardhan Induri, director of bharatstudent.com, told mediapersons here on Wednesday.
According to Anil Singh, chief financial officer, Northgate Technologies, the students would work as interns for three months, and would be retained after assessing their performance.
While we will pay Rs 4,000 per month for the Indian interns, their counterparts abroad would earn anywhere between $300 and $500 per month,” he said
Northgate would invest around 300 million pounds (approximately Rs 25 crore) in the portal over the next two years. Of the total investment, 25 per cent would be capex, while the rest would be infused into creating visibility of the portal and marketing, he added.
The two-month-old portal, which the company claims to be the 45th most-popular site in India, has so far garnered 7.2 lakh registered users, and witnessed 30 million page views and 4 million video views per month.
Source: BS
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One can see aggressive advertising on CNBC and CNN-IBN....Its a different kind of social networking unlike Orkut.. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: deveshkayal
Date Posted: 28/May/2007 at 6:43pm
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Northgate Technologies Ltd has announced that the Board of Directors of the Company at its meeting held on May 28, 2007, inter alia, has approved the following: 1. Recommended 40% final dividend to the shareholders for the Financial Year 2006-2007, subject to the approval of shareholders at the ensuing Annual General Meeting. 2. Recommended the issue of bonus shares in the proportion of 1:1 (one equity share for every one equity share held) for all existing equity shares. The record date for issue of bonus shares will be fixed up on obtaining approval of Members of the Company in the ensuing Annual General Meeting. ------------------------------------------------------------------------------------------
Can anyone analyse the numbers of quarterly results... ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: deveshkayal
Date Posted: 28/May/2007 at 9:46am
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Results are quite impressive.. Consolidated Diluted EPS - 37.40(FY07) from 17.53 in FY06
178% increase in consolidated revenues and 147% increase in consolidated net profit in comparison with previous year.
Other income increased substantially from Rs.66.02 lakhs in FY06 to Rs.650.62 lakhs in FY07.
This is a multibagger in the making... ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: s_praharaj
Date Posted: 29/May/2007 at 11:53pm
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devesh,
I was seeing the result of Northgate Technogies in todays paper. The result is excellent. The notable part of it is that, their advertisement revenue has increased three fold. I was trying to understand their business models. But its a little too technical. So I could not understand it fully.
If any technical TEDDY can analyse this compnay, then it will help. ------------- Shashi Praharaj |
Posted By: deepinsight
Date Posted: 29/May/2007 at 12:18pm
While its not 100% similar one can compare it it doubleclick(acquired by Google), valueclick, tradedoubler (acquired by AOL). They are aggregating advertisors(who want to advertise) and publishers (people who have websites).
Their other efforts are to create their own sites or end users to whom they can advertise through their globe7 and bharatstudent etc.
The CEO was also on CNBC today - check moneycontrol. ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: smartcat
Date Posted: 29/May/2007 at 12:38pm
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Axill is called an 'affiliate network' in internet marketing parlance. As deepinsight said, affiliate network brings together advertisers (eg: ICICI Bank Credit Card division) and publishers (eg: moneycontrol.com) together. This is how it works -
- Let's say ICICI Bank Credit card division is ready to pay Rs. 500 per credit card application
- They approach Axill network and upload their banners etc.
- Moneycontrol.com picks up these banners and puts them in their personal finance page.
- Whenever moneycontrol.com visitors click on the banner and fill up the application form, Axill takes Rs. 500 from ICICI and pays it to Moneycontrol.com
- As an aggregator, Axill earns 20% (industry standard) per transaction (20% of Rs. 500 = Rs. 100) which is to be paid by the advertiser.
Axill will be successful only if it manages to get a large number of advertisers and publishers. It is a volume game.
Commission Junction ( http://www.cj.com - www.cj.com ) is the largest affiliate network in the world - and this was recently acquired by Valueclick for just $60 million - and they've been around for a number of years. Basically, do NOT expect a Rs. 1000 crore valuation for something like Axill.
BharatStudent.com is much more interesting. It could go the way of MySpace.com which was sold to News Corporation for $600 million last year.
Added: I don't have much idea about Global7
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Posted By: basant
Date Posted: 29/May/2007 at 9:52am
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SMartcat: You know it better then me that in the internet space the winners take all. That is there is no room for the number 3 player. Either a company is in niche in that case the market would be small or it should be a leader for example if someone does a search he would never go to rediff for that google is the best search engine and would continue to remain so because the people accessing the net will keep it at the top.
Also this industry is tsrange for the simple reason that it is difficult for new portal themes to happen here. FOr example Web18 is trying a lot of new things like indiwo.com etc but somehow I do not get convinced about these strategies. The money spinnners are in news, financial info and cricket - these themes have made money for people in the WEST and the same would happen here.
I understand internet companies only to the extent of my investment in them maybe you could add/modify that. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deveshkayal
Date Posted: 29/May/2007 at 10:08am
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Thanks Smartcat for explaining the business of Axill.
As far as Bharatstudent.com is concerned,it is purely related to Education,so i dont think it will get a valuation of Myspace or any other player.Globe7 should be interesting,can anyone explain this business.Also will rupee appreciation affect this stock too.Plz refer to the following news and how does it affect Northgate valuation.
"Microsoft Corp. agreed to buy AQuantive Inc. for about $6 billion, its biggest acquisition, as the world's largest software maker seeks to catch up to Google Inc. in the online advertising market. AQuantive shareholders will receive $66.50 a share in cash, Redmond, Washington-based Microsoft said in a statement today. The offer is 85 percent higher than AQuantive's closing price yesterday and more than 29 times the Seattle-based company's anticipated 2008 earnings before some items. Microsoft Chief Executive Officer Steve Ballmer is hustling to keep pace as rivals make purchases to win a bigger slice of the market. Google is buying DoubleClick Inc., which competes with AQuantive in creating Web ads and measuring whether they reach the target audience, and Yahoo! Inc. is adding Right Media Inc. ``Microsoft was getting desperate,'' said Sameet Sinha, a Kaufman Brothers analyst in New York. ``With each passing deal, the scarcity value rose. AQuantive is a one-of-a-kind company.'' Shares of AQuantive jumped 78 percent to $63.79 at 4
p.m. in Nasdaq Stock Market trading. They had added 45 percent this year before today. Microsoft slipped 15 cents to $30.83. ValueClick Inc., a competitor to AQuantive and DoubleClick, jumped as much as 13 percent to $31.59, a record high, before closing at $30. " ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: basant
Date Posted: 29/May/2007 at 10:16am
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With each passing deal, the scarcity value rose
__________________________________________________________
Thst is the real fun time for shareholders!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: pirate
Date Posted: 29/May/2007 at 11:57am
 http://www.moneycontrol.com/mccode/news/searchresult.php?search_str=Venkat%20S%20Meenavalli%20,%20MD%20And%20Ceo%20Of%20Northgate%20Technologies%20&datesel=2 - Venkat S Meenavalli , MD And CEO of http://www.moneycontrol.com/india/stockpricequote/computers-software-mediumsmall/northgate-technologies/11/25/NT02 - Northgate Technologies said that the company’s core business is online advertising. Online advertising has gross margins of 40%, he added.
http://www.moneycontrol.com/mccode/news/searchresult.php?search_str=Globe%207%20&datesel=2 - Globe 7 will contribute USD 20-25mn in FY08, he estimated. They are looking at tieups in US & China to monetise from expansion of user base, Meenavalli said.
Excerpts from CNBC - TV 18’s exclusive interview with Venkat S Meenavalli. Q: Lay out your business model for us with specific reference to some products like Globe 7, which has the market excited? A: Northgate’s core business is online business advertisement. Our core business revolves as an online ad agency called Axill, which is in the US from 2004 and also in UK. Right now we are expanding it into India and Chennai. Globe 7 is one of the communities we are building using VoIP as a tool to reach our advertisement platform to millions of desktops and laptops. The core business revolves around online advertisement, rich media advertisement and video advertisement. That is what the whole world is excited about our acquisition of DoubleClick last month. This industry is growing faster than any other media today in the world and we are set in the US market with plenty of clients. We are one of the top sales aggregators for Walmart, many of the e-commerce stores like around 1400 advertisers in United States. We generate a lot of e-commerce and sales traffic. Similarly, we are expanding into the other markets and in India; Chennai is becoming the biggest online advertisement hub. As you know, the digital media is still moving faster than many other media. What we are doing at Globe 7 is that, on the internet, we are looking at what are the game changes, what the crowd is excited about, one is social networking, the sites like chatting, sites like VoIP. Globe 7 is a product aimed at creating a community of internet telephony users, chatting, real time rich media users. So we have created this product which has around 3 million registered users across the globe with 20 million downloads. We are rated as the world’s number one VoIP provider from last one year. We have tied up with LICO’s and similarly in China, we are tying up with two major networks. So all this gives us a platform to reach out to the masses. Q: So in money terms, what can Globe 7 translate into for revenue? A: This year, Globe 7 has contributed around USD 8 million to our topline. Going forward, we are definitely looking at around USD 20-25 million contribution because major partnerships are coming in this year. We are looking at major community sites or major portals and we are white labeling Globe 7 solution. So what happens is that, suddenly they are getting the complete package of communication, real time communication, and rich media communication. We are also delivering the ads and ad revenue that’s shared between that community and us. Suddenly we are getting those community users. For them, they are saving the capex and opex. Right now, in China we are in talks with two major portals, which are listed on NASDAQ. Major tie-ups are coming up in US also. This gives us a huge reach of crowd of masses. Monetizing the masses is the biggest thing on internet and once you have the masses, you do not even need to monetize them.
Q: How fast is this business growing? Last year you almost trebled your topline from 100 crore to just under 300 crore. Do you see yourself maintaining this kind of exponential growth? A: Yes, of course. Look at the industry; whether you take any industry peers like ValueClick, DoubleClick who are like competitors; we work together. This industry is growing at phenomenal growth rate. Google is the leader on a click basis but overall, if you look at the industry, from USD 1 billion in 2003 to USD 20 billion last year, the whole industry is moving at a fast pace. Look at major media channels like New York Times. Everybody is jumping onto the internet wagon because they want the ad dollars which are moving from the traditional channels to the internet. Q: Who are your big clients at this point and how high margin is this online advertising business? A: In online advertising business, the gross profit margins industries are enjoying is at around 40% today. We have different clients, different segments. We have different educational clients like University of Phoenix. We also promote credit cards like American Express, Citi Group. We promote all the e-commerce stores like Walmart, Target. We bring sales or leads for them. Also insurance companies like AIG and a lot of insurance companies. As we are an ad agency, we work with other agencies. We work with their clients, so we work with all the major top clients in United States. |
Posted By: smartcat
Date Posted: 30/May/2007 at 12:21pm
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Let me do some research on Northgate. I have signed up as a publisher for Axill and my application is under review. I will be able to gauge the prospects of Axill after I get in. I will also be downloading Globe7 ( http://www.globe7.com - www.globe7.com ) later today and see what the fuss is all about.
This type of oligopoly is there only in the search engine field only - not in other categories. There is lots of room of everybody on the internet. But I would estimate that there are about 200 affiliate networks like Axill on the internet - so the competition to get publishers/advertisers will be intense.
IndiWo.com is a 3 year story. They need to get lots of Indian women visiting the portal first. After that, this traffic can be monetized in various ways. Eg: If HLL wants to launch a new saboon, they can tie up with IndiWo.com and launch a branding campaign through advertisements, competitions, freebies etc.
IndiWo.com is modelled after http://www.ivillage.com - www.ivillage.com which was bought by NBC for $600 million
I think I am getting a sense of what Northgate is trying to do. In the CNBC TV18 interview, the CEO mentioned that they have a tie-up with some universities in USA. Looks like their idea is -
- Get college-goers to sign up for BharatStudent.com
- Let the students create the content and build a huge student community
- After they have 10 lakh students, put the ads of USA universities.
Every year 50,000 - 75,000 Indian students fly abroad for studies. USA universities are ready to pay $20 - $40 per lead (student name/contact info) depending on the course. They are lots of other things that can be sold to Indian students - credit cards, bikes etc etc. These are the young spenders of India.
BharatStudent.com should earn good money if they manage to scale up the number of members.
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Posted By: basant
Date Posted: 30/May/2007 at 12:54pm
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SMart Cat: If you were to bet on the internet space in India with a 3-5 year view what companies would you bet on - just one out of these.
1) Web 18 through Tv18
2) Infoedge
3) Northgate ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 30/May/2007 at 3:35pm
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Web18 has 'unfair' advantage over the others - they are owned by a TV network - so promotion of their ventures is extremely cost effective. If you believe that CNBC/CNN IBN and their entertainment channels will be a hit, then you will see a trickle down effect on Web18 properties. Info Edge's Naukri business is good. I recruited a couple of my employees via Naukri. Their resume search is brilliant. Monster Coming to Northgate, I am fairly excited about this company. This is a good way to take exposure to international market. Let me explain their model a bit more. Basant, After reading this, can you do a financial analysis like PE, EPS projection, RoE etc for Northgate and let us know if it is a good investment? As the founder of TED and an 'accidental entrepreneur' yourself, I think you will understand most of what I say here - ---------------------------------------------------------------------------------------- This is a going to be a long post - so read it in leisure. Northgate has 4 separate revenue models - - Axill affiliate network - Globe 7 internet phone software - Private labeling of phone software - Community websites like BharatStudent.com We already discussed Axill. But Axill seems to be different from all other affiliate networks because they are using the captive advertiser base of Axill for their other 3 businesses - Globe7, private labeling & community websites. GLOBE 7 SOFTWARE/PHONE: Globe7 is a internet phone software. Using this, I can call up another PC user and talk to him for free. We can also call from our PC to any landline/mobile in Nothing unique about it - we can do this through Yahoo Messenger (PC to PC only) or Skype. Basically, there are hundreds of software available like Globe7. What's unique about Globe7 is Videos! I just spent a few minutes looking at 'Making of Swimsuit Calender 2007'. There are lots of other videos like latest news, sports, finance, movie trailers etc. It is basically an internet TV. Users can also upload their own videos like in YouTube.com (which was recently acquired by Google for $1.6 billion) Business model of Globe7: - Revenues from PC to landline/mobile calls. - It might be inconvenient to call from a PC. So you can buy their phone from http://usb.globe7.com/ - http://usb.globe7.com/ and plug the phone to USB slot of your computer. Call from their phone instead of your landline. Their main competitor is Vonage.com, a NYSE listed $600 million sales company. - Banner (from Axill network) and text ads (from another network called AdBrite) on the software. For text links, they are charging http://www.adbrite.com/mb/commerce/purchase_form.php?opid=84488&afsid=1 - $2,000 per month. per category. - When we play a video, just like a normal TV, we see ads! KEY RISKS IN NORTHGATE BUSINESS MODEL: - Vonage was recently sued by big telephone companies and the court asked Vonage to stop acccepting new subscribers. - I'm not sure but I think using Globe7 phone in - Setting up an affiliate network costs around $250 - lots of software available on the internet. Entry barriers for setting up a network are very very low. - Execution risk in scaling up community websites like BharatStudent.com. We already see so many television ads on CNBC. The question is - is it getting them new members? - Google is a big competitor for affiliate networks. They are launching video ads, banner ads along with their existing text ads. I believe Google is the largest internet advertisement network now. OPPORTUNITIES IN NORTHGATE: - Vonage appealed to a higher court and the Supreme court overruled the earlier ruling. Vonage can now accept new subscribers. In the developed markets of - Management is showing signs of ingenuity and thinking out of the box. - It is good to have Google as a competitor. Northgate can become an acquisition target if Google sees value in what Northgate is doing! And Google pays in billions of dollars. - International internet advertising is growing at a scorching 35% per annum and is currently at $18 billion. KEY INFORMATION: - Unlike software companies, Northgate is not in a people intensive business. I would estimate that only 30% of their workforce are techies – the rest would be content writers or marketing/advertising people. - As they scale up, to serve ads, they need to continuously upgrade their server infrastructure. There is some talk about ‘server farms’ on their website. Capex is involved in scaling up. Basant Ji, I’m done. Is this info enough for you to analyze the stock financially and see if it makes sense to invest in? I don't think I know how to do equity analysis - I depend mostly on brokerage reports. |
Posted By: basant
Date Posted: 30/May/2007 at 3:55pm
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i have been able to understand the business a bit but with companies like these there is no point in looking at the near term earnings/past financials only reflect what the company has done and we would buy it for what it can do rather then what it has done. Two questions: 1) How sure are you that the growth mommentum will be maintained and that inspite of competitive pressures the company would have able to reflect topline and bottomline growth say by 2010
2) Is there any chance of the same thing being done in a different way - changing technology!
If you are pretty sure about these two things then one should buy Northgate! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 30/May/2007 at 4:48pm
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Not sure about the first question. Technology will keep changing, and so will the way we advertise on the internet. Remember in 2000, banner advertising was extremely hot. In 2005, search advertising broke all records. I have no clue what 2010 will bring in. Perhaps internet TV advertising, who knows?I read the annual report FY06 of Northgate. They are earning most of their profits from telephone calls and in-software advertising through their partnership with AdBrite.
As I expected, Axill is not exactly a money spinner. In FY06, they earned a revenues of $11 million and a very grand net profit of $4,500
 .But future potential is there.
On my part, for now, I won't be making an investment in Northgate but will be keeping it in my watchlist. I would like to see more growth in non-telecom profits.
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Posted By: deveshkayal
Date Posted: 29/Jun/2007 at 10:05am
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Reetesh,
Welcome back to TED !
Northgate is booming !!
------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: deveshkayal
Date Posted: 30/Jun/2007 at 11:19pm
From 560 to 1400, 150% returns in 9 months...
Great Going!! Still has the potential to deliver excellent returns as its market cap is just over 2000crs... ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: reetesh
Date Posted: 30/Jun/2007 at 1:35am
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Thanks Devesh!! To me from here on I think, from our point of view (shareholder) management should try to sell out, like Youtube,skype or bazee did other wise some time in next six months I would look to exit this stock.
Giving valuation of over a billion dollar is not worth it (if to be sold), because thia is not one of those out of the box idea, like youtube or skype is......But I would love to be proved wrong.
Idea would be to carefully look what management is indicating. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: deveshkayal
Date Posted: 04/Jul/2007 at 10:12am
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MUST READ
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Backed by Internet advertising firm Northgate Technologies, BharatStudent.com already has 1.4 million registered users with its unique selling proposition being direction and advice for Indian students seeking entry to universities abroad. Web information company Alexa has placed BharatStudent.com at No. 34 in its list of the 100 most popular Internet sites in India.
That makes it the highest ranked Indian social networking site and the front-runner in the race to draw users away from Orkut, the popular networking site from Google Inc.
With a marketing team of over 400 student representatives on campuses in India and abroad, BharatStudent.com claims it offers content that is not available elsewhere. Students are hired as campus representatives for a monthly fee that varies from Rs4,000 for India-based students to $500 (Rs20,500) for Indian students on overseas campuses. These student reps upload campus videos, earn extra incentives for every new friend they register and act as word-of-mouth marketers.
Such local-focussed strategies are key to customer interest in social networking sites, says an expert. “Building strong localized content is the only way, an India-based social networking site can differentiate itself from Orkut and Facebook,” says Hitesh Oberoi, chief operating officer of Naukri.com.
BharatStudent.com did not go in for any mainstream advertising at launch. Instead, it relied on word-of-mouth marketing by the student community. Users received gifts when they referred friends to join Bharatstudent.com. “We have given away gifts worth Rs50 lakh in the last 100 days,” says Vishnu Vardhan Indhuri, business head of the site.
Bharatstudent.com, which has funding of Rs25 crore, hopes to gain a user base of 5 million and record 150 million page views a month—up from 40 million today—to be able to earn revenues from the site. Indhuri recognizes the power of niche targeting. “Social networking sites must have their own USP targeting a specific group; this gives more valuation. That’s why MySpace, a general social networking site with 80 million users is valued at $16 billion while Facebook , a niche site targeted at students with just 20 million users is already valued at $10 billion,” he says.
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Going by the above valuation, BharatStudent alone is valued at 2000 crores, the market cap of Northgate right now is 2500 crs,so you are getting other businesses of Northgate for 500 crs. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: smartcat
Date Posted: 05/Jul/2007 at 12:38pm
This guy is shooting from his hips. Comments on MySpace/Facebook valuation needs to be taken with a bucketfull of salt.
Some crazy wall street analyst predicted that MySpace would be worth $15 billion http://www.marketingpilgrim.com/2006/09/myspace-to-reach-15-billion-valuation.html - in the next three years . Remember that MySpace was acquired for just about $600 million in 2005. It cannot be valued at $15 billion now.
Facebook was valued at http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BEAB41A61-A391-48CE-A20C-5254A5842493%7D&siteid=mktw - $500 million last year , not $10 billion
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Posted By: deveshkayal
Date Posted: 06/Jul/2007 at 11:08am
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IL&FS has come out with a buy report on Northgate.
"We expect the company to post revenue growth at a CAGR of 47.6% through FY07-09E and strrong earnings growth at a CAGR of 50% over the same period. At the current market price,the stock is trading at a P/E of 26.8x FY08 and 19.4x FY09." ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: reetesh
Date Posted: 07/Jul/2007 at 12:23pm
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Thats what I said Devesh, that if they sell this company we will make more money. Because, product offered by Northgate is not leader in nor it is the first mover in there respective category.
Are you a member of Bharat Student? I am not.
Sustaining the growth will be an issue, having said that in short term it is fine. I would love this company taken over by Yahoo. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: vishal.sahay
Date Posted: 07/Jul/2007 at 4:25pm
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Reetesh pls clear ur inbox ------------- Vishal |
Posted By: deveshkayal
Date Posted: 09/Jul/2007 at 10:30pm
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Hyderabad-based software firm Northgate Technologies on Monday said it would raise up to Rs 450 crore through issue of securities from both the international and domestic market.
In a communique to the Bombay Stock Market Northgate Technologies said its board of directors in a meeting held on July 7, had approved raising the fund in one or more tranches through issue of Global Depository Receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs) and other securities.
The company's board has also approved raising of Northgate Technologies' authorised share capital to Rs 50 crore from Rs 23 crore.The company however, did not give details as to how it would use the fund. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: kaizenbudhi
Date Posted: 13/Aug/2007 at 5:51am
| Vonage charges 30$ per month for using the VOIP phone. It is free unlimited calling in US only. There are host of local players who charge less but charging only 10$ per month and unlimited across 25 countries is something that is too cheap. Calling using Reliance India is 7.4 cents per minute versus Globe7 which 4.9 cents per minute. Need to test the voice quality though. |
Posted By: basant
Date Posted: 21/Aug/2007 at 6:39pm
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This is an interesting link on how Bharat Student draws traffic. I checked for the same on Orkut and this allegation does seem to have some weight.
http://www.alootechie.net/news/bharatstudent-using-questionable-means-to-drive-more-users-to-its-site/ - http://www.alootechie.net/news/bharatstudent-using-questionable-means-to-drive-more-users-to-its-site/ ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 21/Aug/2007 at 6:56pm
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The management if questioned will have one of these two excuses/answers -
- We strongly condemn this sort of cheap marketing. We maintain the highest standards of advertising. This seems to be the work of some of our junior employees. We will ensure that this doesn't happen again.
- Our competitors are trying to tarnish our reputation by using our name in these blogs. We don't have anything to do with this. We are going to complain to authorities after our investigation.
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Posted By: kaizenbudhi
Date Posted: 10/Sep/2007 at 6:33am
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Interesting initiative by the company
http://www.indiantelevision.com/headlines/y2k7/sep/sep3.php - http://www.indiantelevision.com/headlines/y2k7/sep/sep3.php
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Posted By: kaizenbudhi
Date Posted: 10/Sep/2007 at 6:40am
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Globe7 is consistently no.1 in rankings
http://www.myvoipprovider.com/index.php?option=content&task=view&id=92 - http://www.myvoipprovider.com/index.php?option=content&task=view&id=92
Rates are almost half of Reliance India calling from USA.
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Posted By: deepinsight
Date Posted: 16/Sep/2007 at 8:29pm
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This could be quite big as Sina is bigger in China than Yahoo...
Globe7, SINA.com.hk Offer Voice-over-Internet Svcs, Video Streaming IT News Online Staff 2007-09-16 Globe7 HK Ltd. and SINA.com.hk have partnered to provide co-branded voice-over-Internet services and video streaming information and advertising. The agreement also provides a variety of Chinese-language content, including videos, entertainment news, global messaging, blogs and user-generated content to be posted on the co-branded service. The announcement was made by Venkat S. Meenavilli, chairman and managing director of Globe7s' parent company, Northgate Technologies Ltd. Meenavilli said further partnerships between Globe7 and SINA.com.hk will be announced in the near future. SINA.com.hk, a unit of SINA Corp., is a leading portal in Hong Kong providing online media and value-added services for the local community. Globe7 HK, a unit of Northgate Technologies Ltd. Publicly traded company in India with operations in the U.S., UK, and Hong Kong, Globe7 provides a wide range of products and services, including free downloadable soft phone, advertising, hosting, VoIP and online streaming services. ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: kaizenbudhi
Date Posted: 04/Oct/2007 at 6:05am
| The Reserve Bank of India on Wednesday allowed foreign funds to invest up to 74 per cent of NorthGate's paid-up capital. |
Posted By: kaizenbudhi
Date Posted: 31/Oct/2007 at 9:02am
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good consolidated results. standalone not very impressive
http://www.northgatetech.com/documents/qtr2_2007-08.pdf - http://www.northgatetech.com/documents/qtr2_2007-08.pdf
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Posted By: deepinsight
Date Posted: 01/Nov/2007 at 12:43pm
consolidated is the only one which is relevant.
online advertising has grown from 52.54 crore last year to 130.5 crores yoy indicating robust growth in its core. as they have been investing bottom line will not be as great - inherently online advertising is very high margin bizz. ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: deepinsight
Date Posted: 01/Nov/2007 at 12:57pm
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online advertising rev has grown from 52.54 crore last year to 130.5 crores yoy indicating robust growth in its core.
online advertising rev has grown from 116.86 crore last quarter to 130.5 crore qoq indicating decent growth in its core
top line 130.5 vs 117.5 qoq
net margin 20.21 vs 18.37 qoq
top line 130.5 vs 63.68 yoy
net margin 20.21 vs 13.18 yoy ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: praveen
Date Posted: 23/Jul/2008 at 3:28pm
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Any updates on this one? FIIs have increased holding by 2-3% and promoters decreased by a small bit in the June QtrFrom IIFL march report
Northgate recently appointed Clayton Haswell to head Globe 7 in ------------- The quest for knowledge is a never ending Journey |
Posted By: experteye
Date Posted: 23/Jul/2008 at 4:28pm
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I had few northgate but sold out cheaply at 985 a year back from now.Good businesses. ------------- more risk,more profit but have a vision before taking risk,itis all about investment in equities market. |
Posted By: praveen
Date Posted: 23/Jul/2008 at 4:39pm
Assuming it was a pre bonus sale it would be equal to 492 post bonus. CMP is some 310/- odd.
 You shouldn't feel that you sold out cheaply..------------- The quest for knowledge is a never ending Journey |
Posted By: praveen
Date Posted: 22/Aug/2008 at 5:04pm
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Lehman Brothers has offloaded shares worth about Rs 39.47 crore in Northgate Technologies to Deutsche Securities on thursday ------------- The quest for knowledge is a never ending Journey |
Posted By: vijinat
Date Posted: 22/Aug/2008 at 11:21pm
| It is reported in blog.investraction.com by Mr. Shenoy that the promotor of Northgate has been systematically off-loading his company's shares for the past several months. |
Posted By: deepinsight
Date Posted: 23/Aug/2008 at 12:14pm
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I think one of the directors is selling and _seems to have finished selling. ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: Crimsonarcher
Date Posted: 10/Jun/2010 at 3:48pm
Well you are getting the same today at Rs15...you should consider yourself very lucky!!! What ever happened to this company and stock?? Seems like a typical hype cycle if you go through all the comments about this company...anybody lost money in this share? |
Posted By: karn
Date Posted: 10/Jun/2010 at 4:08pm
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Sales decline 38.77% to Rs 7.96 crore
Northgate Technologies reported net loss of Rs 98.77 crore in the year ended March 2010 as against net loss of Rs 253.07 crore during the previous year ended March 2009. Sales declined 38.77% to Rs 7.96 crore in the year ended March 2010 as against Rs 13.00 crore during the previous year ended March 2009. |
Posted By: TCSer
Date Posted: 10/Jun/2010 at 12:40pm
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ITS ONE OF THE ICONIC COS MENTIONED IN MONEYLIFE MAGZINE ARTICLE ON HOW PROMOTERS CHEAT SHAREHOLDERS. I BURNT MY FINGERS IN TANLA N MIC ELECTRONICS |
Posted By: ebizempire
Date Posted: 07/Jul/2010 at 7:27pm
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Dear boarders, any
hope in this counter? I am stuck at Rs38.....is it better to wait or invest in
some other stocks? Please advise |
Posted By: rapidriser
Date Posted: 07/Jul/2010 at 8:56am
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