Infinite Computer Solutions (India) revenue growth accelerated from 0.27% in FY2015 to 21.3% in FY2016

19-05-2016 • About Infinite Computer Solutions (India) ($INFINITE) • By InTwits

Infinite Computer Solutions (India) reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Infinite Computer Solutions (India) is a fast growth stock: FY2016 revenue growth was 21.3%, 5 year revenue CAGR was 19.0% at FY2016 ROIC 14.5%
Infinite Computer Solutions (India) has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's in pair with industry average of 3.3%
CAPEX is quite volatile: ₹629m in FY2016, ₹187m in FY2015, ₹367m in FY2014, ₹795m in FY2013, ₹482m in FY2012
The company has highly profitable business model: ROIC is 14.5%

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

Revenue and profitability

The company's Revenue surged on 21.3%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.8 pp from 10.9% to 9.1% in FY2016. EBITDA Margin declined at -2.5 pp per annum in the last 5 years.

Net Income margin decreased slightly on 0.77 pp from 6.5% to 5.7% in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 the company had CAPEX/Revenue of 3.0%. The company showed decline in CAPEX/Revenue of 2.7 pp from 5.7% in FY2013 to 3.0% in FY2016. Average CAPEX/Revenue for the last three years was 2.1%.

Return on investment

The company operates at good ROIC (14.5%) and ROE (14.2%). ROIC showed almost no change in FY2016. ROE decreased slightly on 1.2 pp from 15.4% to 14.2% in FY2016. ROIC stuck to a declining trend at -3.7 pp per annum in the last 5 years. ROE stuck to a declining trend at -3.2 pp per annum in the last 5 years.

Leverage (Debt)

Debt level is -1.3x Net Debt / EBITDA and 0.4x Debt / EBITDA. Debt surged on 17.4% while cash surged on 257%.

Infinite Computer Solutions (India) has no short term refinancing risk: cash is higher than short term debt (450.7%).

Valuation and dividends

The company's trades at EV/EBITDA 3.4x and P/E 7.5x while industy averages are 17.8x and 21.9x. Infinite Computer Solutions (India)'s EV/(EBITDA-CAPEX) is 5.1x with the industry average at 22.8x.

Financial and operational results

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

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	10,558	13,906	17,327	17,374	21,083	21.3%
EBITDA	2,014	2,184	1,856	1,901	1,921	1.0%
Net Income	1,207	1,307	898	1,129	1,208	7.0%
Balance Sheet
Cash	709	1,556	1,036	871	3,114	257.4%
Short Term Debt	548	838	622	587	691	17.6%
Long Term Debt	43	20	1	4	3	-23.4%
Cash flow
Capex	482	795	367	187	629	235.6%
Ratios
Revenue growth	19.5%	31.7%	24.6%	0.3%	21.3%
EBITDA growth	34.6%	8.5%	-15.0%	2.4%	1.0%

EBITDA Margin	19.1%	15.7%	10.7%	10.9%	9.1%	-1.8%
Net Income Margin	11.4%	9.4%	5.2%	6.5%	5.7%	-0.8%
CAPEX, % of revenue	4.6%	5.7%	2.1%	1.1%	3.0%	1.9%

ROIC	28.7%	23.8%	15.3%	14.8%	14.5%	-0.3%
ROE	26.1%	23.7%	14.1%	15.4%	14.2%	-1.2%
Net Debt/EBITDA	-0.1x	-0.3x	-0.2x	-0.1x	-1.3x	-1.1x

Peers in IT Consulting & Software

Below we provide Infinite Computer Solutions (India) benchmarking against other companies in IT Consulting & Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Ramco Systems ($RAMCOSYS)	9.3%	7.3%	9.9%	37.0%	-
Cyient ($CYIENT)	-	20.6%	17.8%	24.0%	13.1%
Empower India ($EMPOWER)	-3.7%	-13.2%	-32.6%	23.9%	-
Hexaware Technologies ($HEXAWARE)	34.3%	17.3%	13.0%	21.0%	-
Tech Mahindra ($TECHM)	6.8%	25.2%	174.0%	20.1%	-
Median (22 companies)	6.8%	20.4%	13.5%	9.1%	12.2%
Infinite Computer Solutions (India) ($INFINITE)	-	31.7%	24.6%	0.3%	21.3%

Top companies by Gross margin, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Tata Consultancy Services ($TCS)	-	-	47.4%	42.4%	43.9%
Infosys ($INFY)	41.3%	98.1%	35.9%	38.3%	37.4%
Mindtree ($MINDTREE)	31.5%	36.2%	-	34.8%	32.4%
Wipro ($WIPRO)	29.2%	30.4%	32.0%	31.6%	30.4%
Median (4 companies)	32.7%	36.2%	35.9%	36.6%	34.9%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Oracle Financial Services Software ($OFSS)	35.3%	35.2%	37.4%	39.7%	41.1%
Infosys ($INFY)	31.6%	27.9%	26.3%	27.1%	27.1%
Tata Consultancy Services ($TCS)	29.5%	28.6%	30.7%	26.1%	28.2%
Wipro ($WIPRO)	19.1%	20.9%	22.4%	22.3%	21.1%
Mindtree ($MINDTREE)	15.1%	19.8%	20.6%	20.3%	17.7%
Median (25 companies)	15.1%	17.8%	18.5%	14.2%	14.3%
Infinite Computer Solutions (India) ($INFINITE)	19.1%	15.7%	10.7%	10.9%	9.1%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Ramco Systems ($RAMCOSYS)	-	22.1%	15.3%	12.4%	-
Niit Technologies ($NIITTECH)	5.9%	4.6%	6.1%	7.9%	6.0%
Financial Technologies (India) ($FINANTECH)	8.9%	11.4%	-	6.5%	5.4%
Mindtree ($MINDTREE)	2.5%	4.5%	5.0%	5.6%	3.4%
Tech Mahindra ($TECHM)	5.4%	2.6%	5.0%	5.0%	-
Median (20 companies)	3.7%	3.2%	3.5%	3.1%	2.7%
Infinite Computer Solutions (India) ($INFINITE)	4.6%	5.7%	2.1%	1.1%	3.0%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Tata Consultancy Services ($TCS)	48.6%	48.4%	50.2%	40.5%	44.4%
Hexaware Technologies ($HEXAWARE)	33.5%	39.2%	34.7%	35.7%	-
Mindtree ($MINDTREE)	24.9%	34.6%	36.2%	32.0%	28.9%
Sqs India Bfsi ($SQSBFSI)	12.1%	27.0%	29.4%	30.6%	39.9%
Tech Mahindra ($TECHM)	15.4%	20.1%	43.0%	29.7%	-
Median (30 companies)	19.1%	20.4%	23.2%	20.8%	25.1%
Infinite Computer Solutions (India) ($INFINITE)	28.7%	23.8%	15.3%	14.8%	14.5%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
3I Infotech ($3IINFOTECH)	8.5x	20.3x	27.7x	14.7x	-
Ramco Systems ($RAMCOSYS)	8.8x	-	27.6x	4.2x	-
Onward Technologies ($ONWARDTEC)	2.4x	2.2x	4.1x	1.9x	1.2x
Kpit Technologies ($KPIT)	0.3x	0.5x	0.7x	0.4x	-0.3x
Mphasis ($MPHASIS)	-0.1x	0.2x	-	0.2x	-
Median (23 companies)	-0.0x	-0.2x	-0.3x	-0.4x	-0.3x
Infinite Computer Solutions (India) ($INFINITE)	-0.1x	-0.3x	-0.2x	-0.1x	-1.3x

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.