Eye on Infinite Computer Solutions (India) as a growth stock: its revenue grew 14.9% annually over the last three years
26-05-2016 • About Infinite Computer Solutions (India) (
$INFINITE) • By InTwits
Pay attention to Infinite Computer Solutions (India) as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Infinite Computer Solutions (India) showed fast growth in the last financial year. Infinite Computer Solutions (India)'s revenue surged on 21.3% in FY2016. The growth also happened in EBITDA of 1.04% for the same period.
If we look for the longer period the company showed fast revenue growth of 14.9% from FY2013 to FY2016 annually. EBITDA dropped on 4.19% from FY2013 to FY2016 annually.
Infinite Computer Solutions (India) ($INFINITE) financials for the last 5 years
| mln. INR | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 10,558 | 13,906 | 17,327 | 17,374 | 21,083 |
|---|
| Revenue growth, % | | 31.7% | 24.6% | 0.3% | 21.3% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 2,014 | 2,184 | 1,856 | 1,901 | 1,921 |
|---|
| EBITDA growth, % | | 8.5% | -15.0% | 2.4% | 1.0% |
|---|
| EBITDA margin, % | 19.1% | 15.7% | 10.7% | 10.9% | 9.11% |
|---|
| Net Income | 1,207 | 1,307 | 898 | 1,129 | 1,208 |
|---|
| Net Income margin, % | 11.4% | 9.40% | 5.18% | 6.50% | 5.73% |
|---|
| |
| CAPEX | 482 | 795 | 367 | 187 | 629 |
|---|
| CAPEX/Revenue, % | 4.56% | 5.71% | 2.12% | 1.08% | 2.98% |
|---|
| Debt | 591 | 859 | 623 | 591 | 694 |
|---|
| Cash | 709 | 1,556 | 1,036 | 871 | 3,114 |
|---|
| Net Debt/EBITDA | -0.1x | -0.3x | -0.2x | -0.1x | -1.3x |
|---|
| |
| ROIC, % | 28.7% | 23.8% | 15.3% | 14.8% | 14.5% |
|---|
| ROE, % | 26.1% | 23.7% | 14.1% | 15.4% | 14.2% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 10.9% in FY2015 to 9.10% in FY2016. In the longer period EBITDA margin dropped on 6.60 pp from 15.7% in FY2013 to 9.10% in FY2016.
We call Infinite Computer Solutions (India) an attractive growth stock as together with the growth it delivers high ROIC at 14.5%. Three years ago it was higher at 23.8%. It's average level of ROIC for the last three years was 14.9%.
The company's Net Income margin dropped on 0.800 pp from 6.50% to 5.70% in FY2016. In the last 3 years Net Income margin dropped on 3.70 pp from 9.40% in FY2013 to 5.70% in FY2016.
Infinite Computer Solutions (India) operates at ROE of 14.2%. For the last three years the average ROE was 14.6%.
Capital expenditures (CAPEX)
Infinite Computer Solutions (India)'s CAPEX/Revenue was 2.98% in FY2016. The company's CAPEX/Revenue dropped on 2.73 pp from 5.71% in FY2013 to 2.98% in FY2016. It's average CAPEX/Revenue for the last three years was 2.06%.
Leverage (Debt)
Having such a fast growth profile Infinite Computer Solutions (India) keeps negative net debt at -1.3x Net Debt/EBITDA. In the longer period Infinite Computer Solutions (India) showed fast leverage growth of 0.94x from -0.32x in FY2013 to -1.26x in FY2016.
Valuation vs. comparable companies
At the end of trading day today Infinite Computer Solutions (India) traded at 3.1x EV/EBITDA which is 87.3% lower than 24.5x IT Consulting & Software peer group avearge calculated on the basis of 102 companies. The company trades at 7.0x P/E which is 56.1% lower than 15.9x IT Consulting & Software industry avearge calculated based on 7 companies.
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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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 ($TECHM) | 6.8% | 25.2% | 174.0% | 20.1% | |
| |
|---|
| Median (21 companies) | 8.0% | 20.4% | 14.0% | 10.1% | 12.9% |
|---|
| Infinite Computer Solutions (India) ($INFINITE) | | 31.7% | 24.6% | 0.3% | 21.3% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top |
|---|
| 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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 ($MINDTREE) | 15.1% | 19.8% | 20.6% | 20.3% | 17.7% |
| |
|---|
| Median (25 companies) | 15.1% | 17.8% | 18.5% | 14.2% | 17.7% |
|---|
| Infinite Computer Solutions (India) ($INFINITE) | 19.1% | 15.7% | 10.7% | 10.9% | 9.1% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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) ($FINANTECH) | 8.6% | 11.2% | | 6.5% | |
| Mindtree ($MINDTREE) | 2.5% | 4.5% | 5.0% | 5.6% | 3.4% |
| Tech Mahindra ($TECHM) | 5.4% | 2.6% | 5.0% | 5.0% | |
| |
|---|
| Median (20 companies) | 3.7% | 3.2% | 3.5% | 3.1% | 2.5% |
|---|
| Infinite Computer Solutions (India) ($INFINITE) | 4.6% | 5.7% | 2.1% | 1.1% | 3.0% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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 ($TECHM) | 15.4% | 20.1% | 43.0% | 29.7% | |
| |
|---|
| Median (30 companies) | 19.1% | 20.4% | 23.2% | 20.8% | 25.2% |
|---|
| Infinite Computer Solutions (India) ($INFINITE) | 28.7% | 23.8% | 15.3% | 14.8% | 14.5% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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 |
