Infotech Enterprises - Q4FY2013 Result Update - Nirmal Bang

- Infotech Enterprises (IEL) 4QFY13 USD revenue fell 1.9% QoQ to US$85.9mn (our estimate US$85.8mn). Both segments (utilities, telecommunications and content or UT&C, and engineering services or ENGG) posted revenue decline, with UT&C revenue down 1.1% QoQ and ENGG revenue down 2.4% QoQ in dollar terms.

- Rupee revenue was down 2.2% QoQ at Rs4.64bn, in line with our estimate but marginally below consensus.

- EBITDA margin declined 151bps QoQ, in line with our estimate, but 29bps above consensus. Lower margins, along with higher depreciation and lower other income, led net profit to fall 12.2% QoQ to Rs542mn (2.7%/3.6% below our/consensus estimates, respectively).

- We cut our FY14E/FY15E EPS by 3%/4%, respectively, on lower margin expectations but retained our Buy rating on IEL with a revised target price of Rs233 (Rs242 earlier). Cash/share at over 30% of market cap is likely to lend support, with cash flow expected to improve on lower debtor days and tax rate.

Source : Equity Bulls

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