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Infinite Computer Solutions (India) Ltd
Investment Rationale
Strong Telecom domain competency
ICS has built extensive capabilities to cater to Telecom OEMs/ISVs as well as service
providers. ICS offers product engineering and lifecycle management services relating to
telecom equipments used in areas such as transmission, switching, access and operational
support systems. Its solutions for telecom service providers range from consulting
on business and operating processes to the development of business support systems
and operational support systems. ICS has multi-year relationships with leading telecom
service providers and OEMs like Verizon, Alcatel Lucent, Motorola and Tellabs.
Increasing traction in Healthcare and Energy & Utilities verticals
Alongwith Telecom industry, ICS has been building up its competency in growth verticals
like Healthcare and Energy & Utilities. ICS has been awarded deals by ACS, a XEROX
company to implement health insurance programs, Medicare and Medicaid, initiated by
the federal and state government of US. ICS would be responsible for implementing
Medicare & Medicaid in four states in the US. ICS has won a `125 crore deal involving
the IT modernization of Uttarakhand Power Corporation under the R-APDRP initiative .
Strengthening presence in Infrastructure Management Services:
NASSCOM estimates Infrastructure Management Services (IMS) to be the third largest
revenue contributor to the IT services industry by 2020. ICS has been consistently increasing
its revenue share from IMS through multi year engagements with leading organizations
like Fujitsu and iYogi. Under a 4-year agreement, ICS has created a dedicated
entity to deliver IMS exclusively to Fujitsu to enable remote management of its
hardware & network infrastructure, application support & help desk services. ICS has
signed a three year agreement with iYogi to expand its on-demand global tech support.
Non linear revenues enhancing the overall growth:
Alongwith the linear revenues through ADM which constitute over 58% of the total revenue,
ICS has been focusing on an increased share of revenues from Intellectual Property
(IP) Leveraged solutions. Over the years, ICS has developed an extensive repository of
intellectual property through internal development & inorganic routes. ICS has revenue
sharing agreements with leading companies like GE, Motorola & Alcatel Lucent for
maintenance & upgradation of their IP to be sold to existing as well as new client base.
Outlook and Valuation
We expect a CAGR of 28.4% in revenue over FY2010-13E. At the CMP of `161, ICS is
trading at 5.2x FY12E EPS & at EV/EBITDA of 2.4x which is at a steep discount to its
peers. We value the company at 8x FY12E EPS of `30.7. Considering the business plan
and aggressive strategy towards value creation, we expect the valuations to catch up. At
the target PE multiple of 8x which is at a discount of 20% to the peer mid size players,
we arrive at a target price of `246 indicating a potential upside of 52%
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Infinite Computer Solutions (India) Ltd
Investment Rationale
Strong Telecom domain competency
ICS has built extensive capabilities to cater to Telecom OEMs/ISVs as well as service
providers. ICS offers product engineering and lifecycle management services relating to
telecom equipments used in areas such as transmission, switching, access and operational
support systems. Its solutions for telecom service providers range from consulting
on business and operating processes to the development of business support systems
and operational support systems. ICS has multi-year relationships with leading telecom
service providers and OEMs like Verizon, Alcatel Lucent, Motorola and Tellabs.
Increasing traction in Healthcare and Energy & Utilities verticals
Alongwith Telecom industry, ICS has been building up its competency in growth verticals
like Healthcare and Energy & Utilities. ICS has been awarded deals by ACS, a XEROX
company to implement health insurance programs, Medicare and Medicaid, initiated by
the federal and state government of US. ICS would be responsible for implementing
Medicare & Medicaid in four states in the US. ICS has won a `125 crore deal involving
the IT modernization of Uttarakhand Power Corporation under the R-APDRP initiative .
Strengthening presence in Infrastructure Management Services:
NASSCOM estimates Infrastructure Management Services (IMS) to be the third largest
revenue contributor to the IT services industry by 2020. ICS has been consistently increasing
its revenue share from IMS through multi year engagements with leading organizations
like Fujitsu and iYogi. Under a 4-year agreement, ICS has created a dedicated
entity to deliver IMS exclusively to Fujitsu to enable remote management of its
hardware & network infrastructure, application support & help desk services. ICS has
signed a three year agreement with iYogi to expand its on-demand global tech support.
Non linear revenues enhancing the overall growth:
ICS has been focusing on an increased share of revenues from Intellectual Property
(IP) Leveraged solutions. Over the years, ICS has developed an extensive repository of
intellectual property through internal development & inorganic routes. ICS has revenue
sharing agreements with leading companies like GE, Motorola & Alcatel Lucent for
maintenance & upgradation of their IP to be sold to existing as well as new client base.
Outlook and Valuation
We expect a CAGR of 28.4% in revenue over FY2010-13E. At the CMP of `161, ICS is
trading at 5.2x FY12E EPS & at EV/EBITDA of 2.4x which is at a steep discount to its
peers. We value the company at 8x FY12E EPS of `30.7. Considering the business plan
and aggressive strategy towards value creation, we expect the valuations to catch up. At
the target PE multiple of 8x which is at a discount of 20% to the peer mid size players,
we arrive at a target price of `246 indicating a potential upside of 52%
Infinite computer solution is a great company with good and aggressive management. Upender Jitsu is a good leader to work with, no doubt on this. But at the sometime story of subsidiaries India Comnet in Chennai is different
ReplyDeleteOwner of this company sold to Infinite and made good money, now they don’t have any interest in running business but fulfilling interest of their fellow loyal employee who are there in this company since 10 years. They are not competent enough to find a job outside. This business unit is run by mindless management like Allada Srinivas Rao, Murali and Sam like their legacy family business.
Regarding Srinivas Rao, he is a suspended class C government employee because of doing job with false document and now Senior Project Manager in Comnet. His story is in link http://www.apic.gov.in/QRTRLY/ASR/2006/III/405-2006.pdf . He doesn’t know how to write an email and normally a team member draft mail for him to send to client. His English is so poor, using Telugu word while speaking in English is very common even when speaking to USA customer and used to get screwed by customer many times. He is so much scared for his job, he never allow team member to interact with customer. If somebody did my mistake, that’s all, he will be proofed as idiot and nonperformer and will be out of project/company within few months.
In simple word they just are playing dirty cheap politics to keep their existence. Murali is just opposite site of same coin with better English communication and Sam need this long loyal for his existence.
If you have offer of this company I will strongly suggest not to join this company until existing management is replaced with real talented aggressive management of Infinite. This boat is in sinking path because of hell lot of politics of these cheap managers.
I agree with above comment. I am one of the victims of this autocratic management. I was forced to leave this company and didn’t got even my experience certificate and relieving letter. Luckily Cisco didn’t ask for that.
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