CRISIL revises Omnitech Infosolutions` fair value to Rs 205
CRISIL Research has come out with its report on Omnitech Infosolutions. The research firm has revised their fair value upwards to Rs 205 per share and maintained fundamental grade of 3/5 to the company.
March 20, 2013 / 12:34 IST
CRISIL Research has come out with its report on Omnitech Infosolutions. The research firm has revised their fair value upwards to Rs 205 per share and maintained fundamental grade of 3/5 to the company.
While Omnitech's Q3FY13 revenues and EBITDA were in line with CRISIL Research's expectations, net profits were lower due to higher interest cost and tax rate. Given the improvement in consolidated EBITDA, we believe the subsidiaries' (international operations) performance has improved in Q3FY13, compared to Q2FY13. Also, the company continued to grow in the domestic business. We are closely monitoring the effective tax rate (61.1 percent in 9MFY13) and will provide more clarity on the same post our interaction with the management. We maintain our fundamental grade of 3/5.Consolidated revenues grew by 6.2 percent q-o-q (up 5.1 percent y-o-y) to Rs 1,376 mn. Standalone revenues (domestic business) increased by 5.5 percent q-o-q to Rs 1,161 mn.Consolidated EBITDA margin increased by 81 bps q-o-q to 23.9 percent even though standalone EBITDA margin declined by 64 bps during the same period. Cost of goods sold as a proportion of revenues fell to 50.3 percent in Q3FY13 from 51.6 percent in the previous quarter. We believe that losses at the subsidiaries have decreased compared to Q2FY13.Interest cost increased by 34.5 percent q-o-q to Rs 97 mn. We believe the increase is due to higher utilisation of working capital limits.Adjusted PAT improved by 16.4 percent q-o-q to Rs 48 mn. However, it was below our expectations due to higher tax outgo.The effective tax rate was 65.8 percent in Q3FY13 (61.1 percent in 9MFY13). Adjusted PAT margin increased by 30 bps q-o-q to 3.5 percent. Adjusted EPS was Rs 3.2.Valuations rolled forward to FY15
We have used the DCF method to value Omnitech. We have rolled forward our valuation to FY15 and accordingly revised our fair value upwards to Rs 205 per share. At the current market price of Rs 166, our valuation grade is 4/5.To read the full report click on the attachmentDisclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report. The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.© CRISIL Limited . All Rights Reserved. Published under permission from CRISIL"
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