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Infotech Enterprises
Infotech Enterprises announced its 3QFY2011 results, which were almost in line with our
expectations. The company reported revenue of `313.8cr (v/s our expectation of `307.7cr),
up 6.2% qoq, on the back of strong volume growth of 7.9% qoq and negative exchange rate
impact of 1.7% qoq. The engineering, manufacturing and industrial products (ENGG)
vertical witnessed volume growth of 5.2%, following increasing traction witnessed for
engineering services by the aerospace, re-engineering and hi-tech verticals; and the network
and content engineering (NCE) vertical witnessed volume growth of 14.1%. EBITDA margin
declined by 40bp qoq to 15.1% v/s our expectation of 16.2%. The decline in EBITDA margin
was due to foreign exchange headwinds and higher SG&A investments. PAT came in at
`36.8cr v/s our expectation of `38cr, up 11.7% qoq. We currently have an Accumulate
recommendation on the stock with a Target Price of `184. We will be releasing a detailed
result update shortly.
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