Infotech Enterprises - 4QFY2013 results - Angel Broking

For 4QFY2013, Infotech reported a weak set of results on the operating front. The dollar revenues came in at US$85.9mn, down 1.9% qoq, majorly impacted by ramp downs seen in a couple of customer accounts from America geography - one in the heavy engineering vertical and one in the hi-tech industry vertical. In INR terms, the revenue came in at Rs. 464cr, down 2.2% qoq. The EBITDA and EBIT margins declined by 151bp and 232bp qoq to 17.0% and 12.8%, respectively, due to muted volume growth and inch up in employee costs because of healthy gross addition of 783 employees into the system. PAT came in at Rs. 54cr, down 12.3% qoq, impacted by lower other income of Rs. 10cr as against Rs. 16cr in 3QFY2013.

The Management sounded confident of FY2014 turning out to be a better year than FY2013. For FY2104, in the ENGG vertical, the Management indicated that the deal pipeline in the aerospace business segment is robust and is seeing strong signs of growth in the transportation business segment owing to recovery in this segment. The Management cited that they are seeing initial signs of recovery in the hi-tech business segment while heavy engineering is still looking soft. In the UT&C vertical, for FY2014, the Management indicated that a strong pipeline is being seen for the utilities business segment and expects business to remain stable in the telecom segment with growth lower than the average company's growth rate.

We maintain our Accumulate rating on the stock with a target price of Rs. 185.

Source : Equity Bulls

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