Ann: TSI India wins a further 800 ATMs under contract, page-44

Following on from my recent posts, what clearly appears to be underestimated by the market at the moment imo is just how significant TSI India's ATM business has been growing over the years.

TSI India will soon have 2300 ATMs online in total and all as a result of business with ONLY 3 existing banks.

The company have:

* Managed to increase contracts/deals (between 3-5 new contracts/deals) with the three existing banks over the years. Testament to how timely & efficient they are able to rollout new and bigger projects.

* Managed to win bigger ATM contracts that only keep growing in size that are now adding to the bottom line. Recently turned cash flow positive remember.

* Won 2nd ATM Installations in selected cities.

* Increased their ATM network over the years.

* Increased their gross revenue over the years.

* Increased their transaction volumes over the years.

All as a result of the solid business relationships that have been strengthened, nurtured and cultivated over the years.

So what is the limit here? Is there a limit to how many new contracts they can win with each of the existing banks? If we look at their performance over the years, there's every reason to believe that new contracts with existing banks may very well keep growing larger and larger over time.

I know, I've mentioned this numerous times now, but newer larger block contracts should not be underestimated imo. NOTE, this has only just taken place with the latest announcement.

Just playing with numbers here....

Performance to date:

* 2300 ATMs soon to be online.

I've previously highlighted that on page 4 of the Independent Investment Research Report, the research team highlighted that according to TSN, banks are no longer looking to award contracts for less than 100 ATMs. That figure has now been bumped up to blocks of 500 plus, with an execution period of 6-12 months.

For the sake of this fun exercise let's just say that new contracts awarded will be 500.

If just each of the existing banks are able to win just 1 new contract per year of 500 ATMs, here's what the numbers will begin to look like. I think I'm being conservative with my figures here, but let's just stick to these figures for now.

* Bank 1 - 500
* Bank 2 - 500
* Bank 3 - 500

Total per year =  1500 ATMs.

End of Year 1 = Additional 1500 ATMs
Plus the 2300 existing ATMs soon to be online.

Total at the end of year 1 = 3800 ATMs.

Note, this is per year.

Now what are these figures going to look like should 2, 5, 10 new banks be added to the mix?

When the market widens their frame just a little bit, they may just realise what the bigger picture the company is working diligently towards. This is what I call exponential growth and this is only for the ATM side of the business!

Tony