The stock of Kale Consultants, an IT solutions provider for the airlines and travel sectors, has underperformed the broader market in the past six months due to sluggish topline growth. The divestment of its logistics business is likely to improve the scenario, but factors like higher crude prices and intensifying competition among airlines may impact Kale's performance.
In September 2010, the promoters sold their 35.61% stake to a France-based BPO firm Accleya Holding World. As a result, net sales fell by over 4% to 32 crore during the December 2010 quarter.
In September 2010, the promoters sold their 35.61% stake to a France-based BPO firm Accleya Holding World. As a result, net sales fell by over 4% to 32 crore during the December 2010 quarter.
The company is targeting organic growth in the range of 15-20% in the coming quarters.
Kale caters to the airline and travel segments, which are highly vulnerable to changing economic conditions. The recent increase in the prices of crude oil may impact profitability of the airlines sector. Also, the fact that airlines are adding new planes to their fleet may intensify price-based competition among the players. These factors may have an adverse impact on Kale's financial performance in the near term.
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