Accumulate Infotech Enterprises; tgt Rs 162: Angel Broking

“Mr. BVR Mohan Reddy, Infotech’s Chairman and Managing Director, said, the company is now focusing on strengthening its leadership along with improving its systems and processes and making them scalable. Further, the company will take in SAP integration, as currently three of the company’s subsidiaries are operating independently. Along with integrating processes, Infotech is trying to expand its footprint in other addressable markets with existing clients. As per Zinnov Consulting, a leading IT consulting firm, the engineering market is expected to reach US$40bn by 2020 from US$10.4bn currently (led by industries such as aerospace, automotive, consumer electronics and telecom). Infotech, being a leader in the aerospace and telecom engineering spaces, has strong relationships with clients in these areas and, hence, can capitalize on this opportunity.”

“The company’s management is currently focusing on adding and increasing its wallet share from ‘must have’ Accounts across its target verticals. The company is doing this by changing the incentive structure of Customer-facing roles and is investing considerably to improve client mining and account management skills. At the CMP of Rs 144, Infotech is trading at 8.4x FY2013E EPS of Rs 17.1. We maintain our Accumulate rating on the stock with a revised target price of Rs 162, valuing it at 9.5x FY2013E EPS,” says Angel Broking research report.

Institutional holding more than 40% in Indian cos

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