Infinite Computer Soln :Valuation do not capture high growth momentum: Centrum

Valuation do not capture high growth momentum
Infinite Computer Solutions (India) Ltd. (ICSL) is a global provider of application management services, infrastructure management services (IMS) and intellectual property (IP) leveraged solutions. ICSL focuses on telecom, media, manufacturing, healthcare, energy & utilities and infrastructure verticals
With recent acquisition of Patni by iGate, we believe that there can be further consolidation in the mid and small sized IT companies, going forward. Since, the IT industry growth is tapering off and the big IT companies are posting poor growth, we believe that the major IT players will try and go in for consolidation. ICSL is not likely to be acquired, however, we believe that such M&A activities in mid-cap IT segment would improve the valuation of ICSL which is quoting at very low PE of mere 4.1x FY2012 EPS of Rs.28
ICSL’s management has given guidance for FY2013 of 20% YoY and 11% YoY growth in revenues and PAT, respectively in USD terms and a growth of 31% YoY to Rs.1,380 crore and 21% YoY to Rs.146 crore in revenue and PAT, respectively in INR terms. The EPS guidance for FY2013 stands at Rs.34.30 per share. ICSL expects to sign deals worth USD 30-60 million in FY2013 which are currently in the pipeline. We believe that the company will be able to grow its revenues by more than 25% in INR terms, supported by the depreciation in INR against the USD
In FY2012, the company declared an interim dividend of Rs. 4 per share in November 2011 and a further final dividend of Rs.4.50 per share, taking the total dividend to Rs.8.50 per share for FY2012. Also, in May 2012, ICSL announced a stated dividend policy of giving away 30% of net profits as dividend.
The company had cash on books of Rs.157 crore as on March 31, 2012 which works out to Rs.36 per share. At the current market price of Rs.118, the cash on books works out to 30.5% of the current market cap of the company
In FY2012, on a consolidated basis, ICSL registered revenue growth of 20% YoY to Rs.1056 crore and PAT growth of 13% YoY to Rs.120.7 crore. The EPS for FY2012 was Rs.28 per share. Further, in Q1FY13, the company reported strong growth in revenue and net profit of 19.9% QoQ to Rs.319.2 crore and 71% QoQ to Rs.35.4 crore respectively. At the current market price, the stock is available at an attractive valuation of 4.1x FY2012 earnings and 3.4x its FY2013E guided EPS of Rs.34.30. We believe that there will be a shift in valuations of mid and small sized IT companies due to consolidation activity and the average PE multiple of IT companies like ICSL, which are witnessing strong operating performance, should witness a vertical shift. Even if the PE of ICSL moves up just one notch to around 4x FY2013E earnings, we believe that there is strong appreciation potential in the stock price by about 19%. The cash in the books of the company, of Rs.43 per share provides further comfort. Hence, we recommend investors to consider accumulating.

Infinite Computers Solutions: Optimistic Revenue Guidance and dividend policy for FY13E auger well :: BP Wealth

Infinite Computers: LOOKING UP : SPA Securities

Please Share::  India Equity Research Reports, IPO and Stock News 
Visit http://indiaer.blogspot.com/ for complete details �� ��

Infinite came out with its 4QFY12 results, in-line with our estimates. The company has shown positive volume
growth of 0.5% to $53.1mn after two quarters of sequential decline. The FY12 revenue of $220.7mn and EPS of
INR 27.7 exceeded company's guidance. The company has guided towards a 30% USD revenue growth in
FY13E. We expect the company to exceed their EPS guidance of INR 34.3 in FY13E growing at 25.2%. With
higher than industry average growth rates we expect a rerating of the stock from the current 3x LTM PE
multiple to 5x with a target price of INR 190.
4QFY12 and FY12 Revenues - return to growth
The company witnessed a sequential revenue growth of 0.5% in
4QFY12 to $53.1mn (3.1% decline YoY). The onsite pricing declined
by 1.5% with stable offshore pricing. FY12 revenues of $220.7mn
(SPAe: $220mn) grew 14% on the back of growth from BFSI and
healthcare verticals (Others, up by 229% YoY).
Margins decline
Infinite witnessed a 468bps decline in EBITDA Margins for 4QFY12
(15.3%) over 3QFY12 due to (i) higher one-time contract manpower
cost with one of the largest customer's transition project coming
to end and (ii) INR appreciation. In FY12 the EBITDA Margins
expanded by 59bps to 17.3% but higher tax outgo caused a lower
PAT growth of 12.6% to INR 1,207mn
Growth Avenues
The company has hinted towards a USD revenue growth rate,
higher than industry growth rate, at 30% for FY13E. The EBITDA
Margins are expected to be lower at 16% from the FY12 margins
of 17.3% as the company expects to invest the surplus into
extending its next generation 3G messaging platforms products.


We expect the company to meet its revenue guidance on the
back of higher growth from recent deal wins and product
launches.
Outlook and Valuation
Infinite has exceeded its FY12 revenues and margin guidance on
the back of higher growth from BFSI and Healthcare verticals
and INR depreciation. We expect the growth momentum to
continue on the back of marquee deals (Messaging Platform)
and products (to be launched in 2QFY13). We have factored in a
USD revenue growth of 21%/25% for FY13E/FY14E. We expect the
margins to come off a bit due to (i) higher product investments
(ii) Visa Costs hence contract manpower increasing and (iii)
Wage Inflation though partially offset by INR depreciation. We
have factored EBITDA Margins of 16.9%/17.7% for FY13E and
FY14E. Thus on the back of higher than industry growth, stable
margins and exceeding company's guidance, we expect the stock
to be re-rated upwards. We continue to recommend BUY for the
stock with a 2 year target price of INR 190.0 based on 5x FY14E
earnings of INR 38.

Result Update: DLF, BPCL, Infinite Computer Solutions :: Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Click in link to read report: Result Update

DLF Reco: REDUCE CMP: Rs 231 Target Price: Rs 220 Tough times continues ·      Weak quarter of core operations, cash outflows towards land acquisition and high interest costs depleted the objective of non-core asset sale i.e debt reduction (down by just Rs 1.7bn) ·      DLF adds land parcels in Chennai and Mumbai valued at Rs 35-40bn to the non-core assets list. Sale of Aman Resorts is delayed to Q1FY13 & monetization of wind power on cards ·      DLF intends to launch 2msf of group housing in New Gurgaon by FY12 & 2.5msf in Golf links, Gurgaon. We believe these launches will give much abated boost to core operations ·      We maintain our Reduce rating with TP of Rs 220. Cut our bottomline estimates by 22% / 15% for FY12E /13E. At TP, stock would trade at P/BV of 1.4x on FY13E

BPCL Reco: ACCUMULATE CMP: Rs 589 Target Price: Rs 655 In black on additional govt support ·      BPCL reported results which were above our and street estimates with EBIDTA at Rs.37bn and Net profit at Rs31.3bn, while revenue grew by 60.4% YoY to Rs.588bn ·      During the quarter company received budgetary support of Rs69.9bn from the government, while discount from upstream company was Rs.35.7bn ·      Average gross refining margin for Q3 FY12 was at $3.6/bbl as compared to $1.6/bbl, growth of 118% QoQ, mainly led by higher product spread in heavy distillates segment especially in FO ·      Lowered our earnings for FY12E on account of higher under recovery and increased earnings for FY13E on higher Bina thruput. At CMP stock provides limited upside, maintain ACCUMULATE with revised TP of Rs.655

Infinite Computer Solutions Reco: BUY CMP: Rs 83 Target Price: Rs 120 Profit beat aided by strong margin improvement ·      While Infinite’s rev at US$ 53 mn (-6% QoQ) missed est, mgns improved by ~310 bps QoQ to 20% aided by ~11.5% currency depreciation and reduction in employee count ·      Pfts at Rs 393 mn (+28% QoQ) beat exp aided by strong mgn show and hedging gains( Rs 64 mn V/s est of ~Rs 40 mn losses). Top 1/5/10 clients declined by ~15%/5%/8% QoQ ·      Mgmt indicates revival in business from key telecom client. Co currently pursuing 2 large rev sharing deals. Cash generation continues to improve along thesis  ·      Raise FY12/13E EPS by 13%/6% aided by Q3 beat and lower currency resets while we cut our US$ revenues. Retain BUY, TP Rs 120 on inexpensive valuations at <3x 1 yr forward P/E

Tata Chemicals Reco: ACCUMULATE CMP: Rs 363 Target Price: Rs 400 Cautious outlook; maintain Accumulate ·      Q3FY12 consol results were in line with revenues of Rs 38 bn, +32% yoy and EBITDA of Rs 5.6bn, 26% yoy (with margins of 14.6%). TCL reported APAT of Rs 2.3 bn, +70% yoy ·      US subsidiary reported strong results driven by higher topline. However, European business disappointed due to lower margins. Standalone performance remained strong ·      Though demand remained strong across most products, however rising input costs exerted cost pressures  ·      Management maintained cautious outlook. Increased soda ash supply in China will put pressure on prices; decline in phos acid prices will impact IMACID. Maintain Accumulate

McNally Bharat Engineering Reco: HOLD CMP: Rs117 Target Price: Rs 135 No re-rating catalysts, Downgrade to Hold ·      Standalone revenues up 30% yoy to Rs4.9 bn. EBITDA margins stable at 6.5%. Net profit growth at Rs10% yoy to Rs125 mn – ahead estimates ·      MSE disappoints with revenue decline of 28% yoy, EBITDA loss of Rs29 mn and net loss of Rs98 mn. CMT business net profit ahead estimates at Rs32 mn ·      Order inflows dismal at Rs1.4 bn. Order book down 8% qoq to Rs36 bn. But L1 in orders worth Rs8.6 bn. Debt continues to rise – up 46% over Mar’11 to Rs4.2 bn ·      Cut earning estimates by 20% for FY12E and 8% for FY13E. Foresee no re-rating catalysts in near term. Downgrade to Hold with revised target of Rs135 per share

Reliance Power Reco: BUY CMP: Rs 107 Target Price: Rs 155 Continues to deliver on timelines; Reiterate buy ·      PAT of Rs2.04bn above estimates on better profitability at Rosa and higher other income ·      Factor in better profitability from Rosa and higher other income in FY12E (upgrade earnings by 16%) but maintain our FY13E earnings ·      3Q progress – (1) Rosa unit 3 commissioned, (2) Sasan coal mine- own equipments also put to work; considerable overburden removed, (3) Indo mines - JORC report for IInd block and trial barge transportation and (4) Tilaiya mine R&R initiated and section 24 notification in exp. In next 2 months ·      Building solidity - (1) huge cheap captive coal, (2) merchant capacity in captive coal plants only, (3) plants near load centers (PoC), (4) minimizing cost of capital & (5) low to reasonable tariffs - offtake and payment risk minimized  ·      Solidity & positive triggers ignored with stock at 30% discount to fair value. Foresee RPL as the most sustainable private power utility; Reiterate ‘Buy’ with TP of Rs155/Share

Cipla Ltd Reco: SELL CMP: Rs 342 Target Price: Rs 318 No Earnings Catalyst – Downgrade to Sell ·      Cipla’s Q3FY12 results were below expectation with a) Revenues up 14% to Rs17.1bn b) EBITDA up 23% to Rs3.9bn and c) APAT up 16% to Rs2.7bn  ·      Revenues were driven by 18% growth in domestic biz. EBITDA margins declined 215bps QoQ despite strong growth in domestic biz and INR dep ·      Going forward with no favorable impact of currency, we believe gross margins will return to ~55% from current levels of 58%, thereby restricting EBITDA margins to 21-22% ·      On account of delay in Indore SEZ ramp-up and weakening in margins going ahead – we downgrade the stock to Sell with a target price of Rs318 (18xFY13 EPS of Rs17.6)

Eicher Motors Ltd Reco: HOLD CMP: Rs 1,705 Target Price: Rs 1,915 Mixed bag, Downgrade to HOLD ·      EBIDTA at 1.5bn (4% below est). APAT at Rs 854mn (in line). CV business surprised positively, while two wheeler performance was below est. ·      Waiting list for two wheelers continues despite capacity increase. Strong CV performance will be driven by expansion in HD ·      Fine tune CY12 est. by -2% to Rs 137.8. Introduce CY13 with EPS of Rs 161. See downside risk to vol. est. due to macro environment/capacity constraints ·      Downgrade to HOLD with a TP of Rs 1,915 (current business value – Rs 1,762, NPV of engine business – Rs 153). Key triggers – faster capacity addition of two wheelers

Sun Pharma Reco: ACCUMULATE CMP: Rs 552 Target Price: Rs 586 Strong Performance - Maintain Accumulate ·      Sun Pharma’s Q3FY12 results - Revenues at Rs21bn (up 34% YoY), EBITDA at Rs9.6bn (up 119% YoY) and RPAT at Rs6.6bn (up 91% YoY) ·      Strong performance was led by 63% growth in US which was driven by ramp-up in market share of recently launched products, increase in selling prices of select products in Taro and INR dep. Domestic biz grew 17% ·      Going forward in FY13E, growth will be driven by Para-IV launch of Lexapro, Plavix, Eloxatin and Stalevo in US and continued momentum in domestic biz ·      With strong traction from US market and a stable domestic business – we maintain Accumulate rating with a revised target price of Rs586 at 21x FY13E EPS of Rs28

Motherson Sumi Systems Ltd Reco: ACCUMULATE CMP: Rs 174 Target Price: Rs 210 In line, Retain ACCUMULATE ·      EBIDTA at Rs 2.6bn was in line (est. Rs 2.5bn). APAT at Rs 1.2bn was above est. of Rs 885mn due to lower tax rate. SMR reports 150bps QoQ margins expansion with higher utilization ·      Peguform reports Sales/Adj. EBITDA/APAT of Rs11.5bn/Rs 43mn/ Rs -156mn for 38 days. Peguform to be EPS accretive but not assigning value due to limited information ·      Concerns with Debt overdone. Net Debt (ex Peguform) is Rs 16bn (marginally up QoQ).  Of the total gross debt of Rs 29bn of Peguform, debt attributable to MSSL is only Rs 11bn ·      Retain ACCUMULATE with a TP of Rs 210.  SMR margins to further improve with increase in utilization. Major benefit visible from 2QFY13

State Bank of India Reco: HOLD CMP: Rs 2,129 Target Price: Rs 1,950 Slippages remain higher; capital infusion inadequate ·      SBI Q3FY12 – NII at Rs114bn ahead of estimates aided by higher loan growth and strong NIM at 4.1%. However, with lower other inc, PAT at Rs32.6bn came in line with our est ·      Asset quality continues to disappoint with gross slippages at Rs81bn (3.6% ann). Further, despite equity infusion, Net NPL / networth would stand at high 20%+ for FY12 ·      Loan growth at 7% qoq came in as a surprise. With 3% qoq growth in deposits, LDR inched 330bps qoq to 85%. Mgmt guided for 16% yoy loan growth for FY12 ·      Capital infusion + plough back of PAT would raise tier I CAR to 9%.  Also, with lower accretion in net slippages, pressure on asset quality to ease. Upgrade to Hold with PT of 1,950

Infinite Computer Solutions High client concentration comes to haunt BUY ::Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Infinite Computer Solutions

High client concentration comes to haunt

BUY

CMP: Rs91                                        Target Price: Rs120

---

n     Infinite reported revenues of US$ 56.2 mn(-4% QoQ), missing expectations driven by ramp down in a key top client. Mgns were flat QoQ (est of +80 bpsQoQ) aided by weak currency 

n     Pfts at Rs 307 mn bettered est aided by higher other income. Net HC reduced for the 2nd qtr in a row(-146 QoQ) with revenues from top 5/10 clients declining by ~7.5/3.2% QoQ

n     Co has cut it’s  US$ revenue guidance to US$ 220 mn (+14% YoY) V/s  26.5-29% YoY growth outlook higher on account of rampdowns in a key telecom client account

n     Cut FY12/13E EPS by ~8.5/15% to ~Rs 26/28 driven by lower US$ rev assumptions, albeit aided by lower currency resets. Valuations inexpensive at <4x FY12 P/E. BUY, TP Rs 120

Infinite Computer Solutions (India) Ltd. Concall Invite on Wednesday, 9 November , 2011 at 11.00 AM

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

EMKAY GLOBAL FINANCIAL SERVICES LTD. is pleased to invite you for a conference call to discuss the Q2FY12 results with Mr. Sanjay Govil – Chairman Mr. Upinder Zutshi – Managing Director & Chief Executive Officer Mr. Sanjeev Gulati – Sr. Vice President - Finance INFINITE COMPUTER SOLUTIONS (INDIA) LTD On Wednesday, 9 November , 2011 at 11.00 AM Dial-in Numbers: Primary Number: +91 22 3065 0020 Secondary Number: +91 22 6629 0048 (The numbers listed above are universally accessible from all networks and all countries) Local Access Number: 6000 1221 (Available in - Delhi, Bangalore, Chennai, Hyderabad, Kolkata. Accessible from all major carriers except BSNL/MTNL) 3940 3977 (Available in - Gurgaon (NCR), Bangalore, Kolkata, Cochin, Pune, Lucknow, Ahmedabad, Chandigarh. Accessible from all carriers) Toll Free Number: USA: 1 866 746 2133 UK: 0 808 101 1573 Singapore: 800 101 2045 Hong Kong: 800 964 448 For further information please contact
Manik Taneja Tel: +91 22 66121253 Cell: +91 9833934924

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

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Infinite Computer Solutions

Strong operating performance, retain BUY

BUY

CMP: Rs 164                                        Target Price: Rs 250

---

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

Infinte Computer Concall Invite on Tuesday, 10 May 2011 at 11.00 AM

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��