Infinite Computer Solutions (India) Net Income jumped on 25.7% in 2015 and EBITDA Margin showed almost no change

21-05-2015 • About Infinite Computer Solutions (India) ($INFINITE) • By InTwits

Infinite Computer Solutions (India) reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Infinite Computer Solutions (India) has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 3.5%.
CAPEX is quite volatile: 187 in FY2015, 367 in FY2014, 795 in FY2013, 482 in FY2012, 1,198 in FY2011
The company has highly profitable business model: ROIC is at 14.8%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Infinite Computer Solutions (India) ($INFINITE) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	8,833	10,558	13,906	17,327	17,374	0.3%
EBITDA	1,496	2,014	2,184	1,856	1,901	2.4%
Net Income	1,072	1,207	1,307	898	1,129	25.7%
Balance Sheet
Cash	189	709	1,556	1,036	871	-15.9%
Short Term Debt	248	548	838	622	587	-5.6%
Long Term Debt	269	43	20	1	4	252.0%
Cash flow
Capex	1,198	482	795	367	187	-49.0%
Ratios
Revenue growth	-57.9%	19.5%	31.7%	24.6%	0.3%
EBITDA growth	21.5%	34.6%	8.5%	-15.0%	2.4%
EBITDA Margin	16.9%	19.1%	15.7%	10.7%	10.9%	0.2%
Net Income Margin	12.1%	11.4%	9.4%	5.2%	6.5%	1.3%
CAPEX, % of revenue	13.6%	4.6%	5.7%	2.1%	1.1%	-1.0%
ROIC	29.3%	28.7%	23.8%	15.3%	14.8%	-0.5%
ROE	28.8%	26.1%	23.7%	14.1%	15.4%	1.3%
Net Debt/EBITDA	0.2x	-0.1x	-0.3x	-0.2x	-0.1x	0.1x

Revenue and profitability

Infinite Computer Solutions (India)'s Revenue showed almost no change in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.5 pp from 17.5% to 20.0% in FY2015.

Net Income marign increased slightly on 1.3 pp from 5.2% to 6.5% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Infinite Computer Solutions (India) had CAPEX/Revenue of 1.1%. The company's CAPEX/Revenue decreased on 3.5 pp from 4.6% in FY2012 to 1.1% in FY2015. Average CAPEX/Revenue for the last three years was 3.0%.

Return on investment

The company operates at good ROIC (14.78%) and ROE (15.38%). ROIC decreased slightly on 0.53 pp from 15.3% to 14.8% in FY2015. ROE increased slightly on 1.3 pp from 14.1% to 15.4% in FY2015.

Leverage (Debt)

Debt level is -0.1x Net Debt / EBITDA and 0.3x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from -0.2x to -0.1x in FY2015. Debt decreased on 5.2% in FY2015 while cash dropped on 15.9% in FY2015.

Valuation

Infinite Computer Solutions (India)'s trades at EV/EBITDA 5.4x and P/E 9.3x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 6.0x with the industry average at 4.7x.

Appendix 1: Peers in IT Consulting & Software

Below you can find Infinite Computer Solutions (India) benchmarking vs. other companies in IT Consulting & Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tech Mahindra ($TECHM)	-85.8%	6.8%	25.2%	174.0%
Tata Consultancy Services ($TCS)		31.0%	28.8%	29.9%	15.7%
Mindtree ($MINDTREE)		26.6%	23.2%	28.8%	17.0%
Infosys ($INFY)		22.7%	19.6%	24.2%	6.4%
Sqs India Bfsi ($SQSBFSI)		46.4%	32.9%	20.4%	10.1%
Median (21 companies)	31.5%	22.9%	20.4%	14.0%	10.6%
Infinite Computer Solutions (India) ($INFINITE)		19.5%	31.7%	24.6%	0.3%

Top companies by Gross margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Tata Consultancy Services ($TCS)				47.4%	42.4%
Infosys ($INFY)	45.3%	41.3%	98.1%	35.9%	38.3%
Mindtree ($MINDTREE)	32.8%	31.5%	36.2%		34.8%
Wipro ($WIPRO)	31.5%	29.2%	30.4%	32.0%	31.6%
Median (4 companies)	34.7%	32.7%	36.2%	35.9%	36.6%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Oracle Financial Services Software ($OFSS)	37.4%	35.3%	35.2%	37.4%	39.7%
Infosys ($INFY)	32.5%	31.6%	27.9%	26.3%	27.1%
Tata Consultancy Services ($TCS)	29.9%	29.5%	28.6%	30.7%	26.1%
Wipro ($WIPRO)	21.1%	19.1%	20.9%	22.4%	22.3%
Mindtree ($MINDTREE)	11.8%	15.1%	19.8%	20.6%	20.3%
Median (15 companies)	18.0%	15.1%	17.8%	18.5%	15.9%
Infinite Computer Solutions (India) ($INFINITE)	16.9%	19.1%	15.7%	10.7%	10.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Ramco Systems ($RAMCOSYS)	16.4%		22.1%	15.3%	12.4%
Niit Technologies ($NIITTECH)	4.1%	5.9%	4.6%	6.1%	7.9%
Mindtree ($MINDTREE)	5.6%	2.5%	4.5%	5.0%	5.6%
Geometric ($GEOMETRIC)	3.8%	3.5%	4.2%	4.0%	4.3%
Infosys ($INFY)	4.7%	4.9%	5.2%	5.5%	4.2%
Median (14 companies)	4.0%	3.7%	3.2%	3.5%	3.1%
Infinite Computer Solutions (India) ($INFINITE)	13.6%	4.6%	5.7%	2.1%	1.1%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tata Consultancy Services ($TCS)	47.1%	48.6%	48.4%	50.2%	40.5%
Tech Mahindra ($TECHM)	19.2%	15.4%	20.1%	43.0%
Geometric ($GEOMETRIC)	19.6%	29.9%	46.4%	41.1%	20.6%
Mindtree ($MINDTREE)	14.9%	24.9%	34.6%	36.2%	32.0%
Cmc ($CMC)	31.5%	26.2%	33.2%	35.3%	26.0%
Median (30 companies)	16.0%	19.1%	20.4%	23.2%	20.7%
Infinite Computer Solutions (India) ($INFINITE)	29.3%	28.7%	23.8%	15.3%	14.8%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
3I Infotech ($3IINFOTECH)	3.5x	8.5x	20.3x	27.7x
Ramco Systems ($RAMCOSYS)	4.0x	8.8x		27.6x	4.2x
Starcom Information Technology ($STARCOM)				17.4x
Onward Technologies ($ONWARDTEC)	2.7x	2.4x	2.2x	4.1x	1.9x
Kpit Technologies ($KPIT)	-0.7x	0.3x	0.5x	0.7x	0.4x
Median (23 companies)	-0.2x	-0.0x	-0.2x	-0.3x	-0.7x
Infinite Computer Solutions (India) ($INFINITE)	0.2x	-0.1x	-0.3x	-0.2x	-0.1x

Infinite Computer Solutions (India) stock price chart

Infinite Computer Solutions (India) financials

mln.	FY2010	FY2011	FY2012

Revenue	20,976	8,833	10,558
EBITDA	1,231	1,496	2,014
Net income	791.7	1,072	1,207
CAPEX	467.3	1,198	481.8
Debt	609.0	517.6	591.3
Cash	479.3	189.1	709.0

About Infinite Computer Solutions (India)

Infinite Computer Solutions (India) Limited, together with its subsidiaries, provides software solutions in the areas of application management, infrastructure management, product engineering, and mobility and messaging in India and internationally. The company offers application management services, such as intelligent outsourcing, enterprise application management, testing, enterprise analytics, enterprise mobility, and service oriented architecture; and infrastructure management services comprising remote infrastructure monitoring and management, datacenter management, production support, network management, end user computing, and cloud-based tech support. It also provides product engineering services in the areas of datacom, wireless, optical, next generation network/IMS, NMS/ESS/OSS/BSS, messaging infrastructure, and broadband networking. In addition, the company offers mobility and messaging products and services, such as converged messaging server, rich communication suite, multimedia messaging service center, short messaging service (SMS) center, and SMS gateway; value added services, inter-carrier, public safety messaging center, and enterprise messaging service solutions; and deployment services, technical consulting, custom solutions, product support, and professional services. The company offers its IT services and solutions to the telecom, healthcare, media and content, energy and utilities, and banking and finance industries. The company was founded in 1999 and is headquartered in Bengaluru, India. Infinite Computer Solutions (India) Limited is a subsidiary of Mahavi Holdbul Inc.