8K Miles: Keep yourself away 8K Miles

The company that I covered in the last quiz is 8K Miles. This company, in my
opinion, SHOULD BE AVOIDED.

I have already given several reasons in the form of quiz questions. But I am
providing some additional inputs that I received from various respondents or
researched during the course of discussion of the responses received. It was
like more we dig into this company, more skeletons come out. Niteen S Dharmawat

- This company maintains two websites, one for investors (http://8kmilessoftwareservices.com/)

and another for customers (http://www.8kmiles.com/). I dont understand the logic for
maintaining two websites with no cross references. Moreover, the QTR results on their investor
website are updated till Sep 2013 while the Shareholding Pattern (SHP) info is updated till Dec
13. I am not sure why they have not updated these info and results till March 2014, when these
are already declared?
- As per SEBI guidelines from 1st April 2011 it is mandatory for a listed company to have updated
information about the company's basic business and financial details, shareholding pattern,
corporate governance, contact details, as also information about any agreements with media
companies on its website. As per the SEBI guideline, the companies not adhering to the
requirement will face the risk of getting delisted from the stock exchange where their shares
are traded.
- As I am informed in one of the mails by an alert investor and this is very serious, if true. 8K
Miles disclosed the results to the media before sharing this with exchanges. The Promoter
gave the results of the company in an interview published in HBL on May 5, well before results
were declared to the exchanges on 28th May. This is downright illegal, not just unethical. HBL
Interview published on 5th may (http://www.thehindubusinessline.com/features/taking-the-
extra-mile-in-cloud/article5979024.ece) while the results disclosed to BSE on 28th May, with the
PDF clearly carrying the Date as 28th May
(http://www.bseindia.com/corporates/anndet_new.aspx?newsid=07c209e0-c36f-4220-b71e-
7eba0c2f2e38)
- They claim to be the 'Premier Consulting partners' of Amazon and they say that they are one of
the 15s in the world. But a quick check on Amazon's website (http://www.aws-partner-
directory.com/PartnerDirectory/PartnerSearch?type=SI) will reveal that they are a level below
'Advanced Consulting Partner' and not Premier Consulting Partners. There are hundreds of ACPs
and several PCPs listed on Amazon's website.
- The founder in the interview claims he took one company public and founded two others. The
taking public story looks like a bit of a stretch. They acquired an already listed shell company
which was earlier called PM Strips (Belonging to Surana Group) based in Secundrabad, not sure
what was the value in doing that (other than gaining access to a listed company). The Open offer
document on the SEBI site has the details of that takeover.
http://www.sebi.gov.in/takeover/8kmileslof.pdf
- The Prior companies founded by Suresh Venkatachari seem to be unknown entities like
SolutionNet Consulting, Agama Services and Mentor Minds.
http://www.sec.gov/Archives/edgar/containers/fix044/1093468/000094935304000631/f8k-
111704.txt

The stock has further rallied after I posted my quiz but it does not mean that it has given the answers
to the questions raised. If we were around in year 2000 then we know that stocks like Pentamedia, DSQ
Soft, Himachal, Silverline, and many more companies with Info/Technology as suffix, touched new highs
on an every minute basis.

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There is no doubt about the scope of the Cloud Computing so was the case with IT Services in year 2000.
However, we are putting money not in the stories but in the company where the ethical foundation is
doubted. I would like to throw my money in Arabian Sea than giving it to such companies.

I will be ready to change my stand about 8K Miles provided I get a solid proofs opposing what is stated
above. In absence of any logical reasons, I will stay away and place caution for anyone dwelling with this
stock. Choice is of individuals.

Cheers,
Niteen S Dharmawat
Blog: http://dharmawat.blogspot.com/
Twitter: @niteen_india
Facebook: https://www.facebook.com/dharmawat
Slideshare: www.slideshare.net/ndharmawat/

IMPORTANT DISCLAIMER: The above factsheet is based on the sources that I consider reliable.
However, I do not vouch for the accuracy of the data and will not be responsible for any profit or loss.
The above factsheet is presented to get the feedback and in no way buy/sell/hold recommendations.
Please carry your research before you take any financial decisions. Investment in equity shares has its
own risks. Sincere efforts have been made to present the right investment perspective. The information
contained herein is based on analysis and up on sources that I consider reliable. I, however, do not vouch
for the accuracy or the completeness thereof. This material is for personal information and I am not
responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial
profits or loss which may arise from the recommendations above. I sincerely request you to do your
homework before you take any position whatsoever. I, my relatives or friends may have/have positions in
the stocks discussed here.

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 8K Miles Quiz

Sunday, May 25, 2014

Can you find the stock? NOT my next find
Source: http://www.dharmawat.blogspot.in/2014/05/can-you-find-stock-not-my-next-find.html

I got intrigued when within a short span I was asked about this company from multiple sources. This
included analysts, common investors, and retired professionals. So thought to spend time to understand
this company and that is how it has become NOT my next find. :-)

The company claims to be the 'Premier Consulting partner' and says that it is one of the 15s in
the world. Is it so?
It has changed its name in the past and gave a fancy name that at least I could not understand
It was a steel manufacturer, after name change and alteration of object clause A of MoA, it has
entered into the field that is the talk of the town
The name and MoA modifications proved good for the company. The market cap has gone up
more than 25 times in last 4 years
The stock is trading more than 6 times the book value of 2013
The stock is trading more than 40 times its revenue of 2013, and we expect to see moon now.
The company has not paid dividends at least in last 6 years
The promoters issued additional shares and increased authorized capital at least two times in
last 5 years
It has issued the bonus shares also in the past, what else do you want?
The promoters holding is healthy at around 66% but with a caveat. More than 50% of promoters
holding is pledged (i.e. 36% of the total holding). It means unpledged promoters holding is just
30%
The OCF was negative in 2013 and zero OCF was reported for four years from 2008-2011.
I know at least one leading brokerage house that has a report on this company and also issued a
visit note to its clients
No wonder the stock price is doing so well and gullible investors want to ride on the left out
wave.

Disc.: I do not hold this stock.

p.s.: The above factsheet is based on the sources that I consider reliable. However, I do not vouch for
the accuracy of the data and will not be responsible for any profit or loss. Please carry your research
before you take any financial decision.

Previous two quizzes: You can see the answers under the comments section using following links -
http://goo.gl/5ZQVdE and http://goo.gl/5Dv8qE

Blog: http://dharmawat.blogspot.com/ Page: 3

 About the author
Niteen is an MBA and cleared CFA Level 2, CFA Institute USA. A firm believer in long-
term financial planning, and a 20 years veteran of the stock market, he likes to analyse
the economy, and individual stocks. He also conducts investor education sessions.

He likes reading books/magazines/news papers on the topics as diverse as general

management, technology, investment, fiction, marketing and the Gita. He is a person
who believes in "Everything else can stop but learning".

Niteen can be reached:

Blog: http://dharmawat.blogspot.com/
Twitter: @niteen_india
Facebook: https://www.facebook.com/dharmawat
Slideshare: www.slideshare.net/ndharmawat/
Mobile: +91-9850571857

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