NORTHGATE TECHNOLOGIES:

Result Analysis:

I think many of you are holding the shares of Northgate Technologies Ltd bought in the last few months time frame. The company came out with results along the expected lines---no fire-works or pyrotechnics. The company came out with a Net Loss of Rs.77.14 Cr with a substantial scaled down revenues. Though the results apparently might looked too much disappointing, but then the current price of the share at Rs.22.95, has already discounted the current results and I believe that it should not go down from here.....

Now let  us dig a bit and see if we could find some oasis in the desert:

1. The Company started new business segment of providing Algorithmic trading, Global Electronic Communication Network, Direct Market Access and Order Management System Networks Services for Securities Trading. Northgate will extend its expertise of managing High capacity, highly scalable server farms capable of processing massive real time and historical data.

Northgate has entered into strategic alliance with Stampede Holdings Private Limited (SHPL) to provide such services. SHPL is a Global Derivative Market Maker with its own proprietary algorithms on equity derivatives, structured products, fixed income market and ECN market. SHPL on non-exclusive with absolute termination rights basis is licensing its ECN/VWAP Algorithm Suite to the Company. SHPL will manage its benchmark algorithms combined with best of VWAP / TIME SLICING / IMPLEMENTATION SHORTFALL and will calculate the Arrival Pricing using smart routing methods.This is expected to generate substantial revenues for the company, as the competition is less in this segment.
2. The group has carried out considerable restructuring in the last few months and scaled down it operation to suit the current conditions and make its business a sustainable venture.
The company could open its closed offices (overseas) as the properties there are still lying in Godowns, but their value has been written off in the balance sheet.

3. The company has also stated it has now attained a critical mass which will be able to sustain its operations in the "foreseeable future".
Another positive: Northgate Technologies Ltd, said "No further write-downs of fixed assets is expected".

4. The company as per recent announcement, will now sell the internet properties, at the right price or might not do at all. This is a marked shift from its earlier stance when the company was willing to sell off its web-properties to meet its working capital requirements. 

This is great turnaround considering the earlier stage when the company was bent on selling those properties to meet daily expenses, as mentioned earlier.
5. Two experienced persons, Mr. Srinivasulu Palacharla and Mr. Sujit Kumar, Director - Media Sales of Social Media India Limited, a Wholly Owned subsidiary, have been appointed as an Additional Directors of the Company with effect from January 24, 2010. Both of these persons carries a rich baggage of experience and this might help the company to make great strides in future.
6. Northgate Technologies Ltd commenced securities trading on 10th December, 2009, through a newly acquired subsidiary, Van Quant Tech Securities  (P) Ltd. Since the main objctive of Van Quant is to engage in the trading of securities (which qualifies it to be a non-banking Financial Company), Hence the company will apply to RBI for registration under section 45 (1A) of RBI Act. The company would apply to RBI and other relevant authorities in the next week, for the necessary approval and it is expected that, barring mishaps, the company is probably start full fledged trading operation within the next 45-60 days time frame. 
THUS THE FUTURE LOOKS GOOD FOR NORTHGATE TECHNOLOGIES LTD.