Northgate Technologies Ltd.

Northgate is the best play amongst the listed stocks on the global Internet revolution. The Company is expected to get a major fillip from rapidly growing online advertising industry and rising popularity of e-commerce. Both the offerings of the company, Axill (online advertising network/exchange) and Globe7 (patented SIP based VoIP phone), are fast gaining popularity and mileage worldwide especially in US. Company’s revenues and earnings grew 58.7% and 199% respectively in FY06. It has already surpassed FY06 numbers in H1 FY07. At a P/E valuation of 27.7x based on annualized H1 FY07 EPS of Rs30, it is the most inexpensive play on the Internet revolution when compared with significantly higher valuations of Info Edge and global counterparts like Google, Rediff, etc. We expect significant upside from the current levels