Angel Broking neutral on Infotech Enterprises

Angel Broking's report on Infotech Enterprises

"Infotech Enterprises has been making investments to strengthen its product portfolio, and taking initiatives to improve its financial metrics. For FY2014, in the ENGG vertical, the Management indicated that the company sees a good deal pipeline in the aerospace business segment with new customer programs starting in 2HFY2014. The Management cited that it is seeing initial signs of recovery in the hi-tech business segment with stability coming in the top three customers. In the heavy engineering business area, the company is seeing new opportunities coming up in energy, oil & gas and mining markets. In the UT and D&A business verticals, for FY2014, Infotech is working on new service offerings to capture the opex of client budgets along with the capex portion that the company is targeting currently. Over FY2013-15E, we expect the company to post a USD and INR revenue CAGR of 6 percent and 12 percent, respectively. We expect the EBITDA margin of the company to remain in a narrow range and expect a CAGR of 11.8 percent and 10 percent in EBITDA and PAT respectively. We value the company at 9.5x FY2015E EPS of Rs 25.3, which gives us a target price of Rs 240; we maintain our Neutral view on the stock," says Angel Broking research report.

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