Infinite Computer Solutions - Strong operating performance, retain BUY:: Emkay

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Infinite Computer Solutions

Strong operating performance, retain BUY

BUY

CMP: Rs 164                                        Target Price: Rs 250

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n     Strong show with March’11rev at US$ 55 mn (+11.4% QoQ V/s est +6.7% QoQ). Mgns improved by ~40 bps QoQ to 17.1% despite decent headcount addition (up by ~338 QoQ to 4,806)

n     Revenue growth led by ramp ups on iYogi contract and messaging platform. IP leverage /IMS revenues up by ~27%/52% QoQ

n     Impressive client addition during the quarter. However are disappointed by the poor cash generation in the quarter (impacted largely by investments on the APDRP contract)

n     Cut FY12/13E EPS mgnlly by ~2.7%/2.3% to Rs 29.4/36.3 as we incorporate higher amortization charges. Remain positive given inexpensive valuations at ~5.6x/4.5x FY12/13 P/E