Infotech Enterprises - Q2FY14 Result Review - Angel Broking

Infotech Enterprises reported inline revenue growth for 2QFY2014 while the operating margin and bottomline came in way ahead of our as well as street expectations. The dollar revenues came in at US$88mn, up 1.8% qoq, aided by ~2% qoq volume growth. Growth trajectory resumed for company after three quarters with 3 out of 4 business units posting more than 4.5% qoq growth in constant currency. In INR terms, the revenue came in at Rs. 549cr, up 14% qoq. The EBITDA margin of the company grew by ~320bp qoq to 19.8%, driven by benefits from INR depreciation and operational efficiencies which were partially offsetted by continued investments in branding, sales and new offices. Operating margin of the company finally expanded on a sequential basis after five continuous quarters of underperformance. PAT stood tall at Rs. 72cr, up 33%.

Management indicated that the company has a healthy deal pipeline visibility to sustain the growth momentum. The stock is currently under review.

Source : Equity Bulls

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