CRISIL revises Omnitech Infosolutions` fair value to Rs 199
CRISIL Research has come out with its report on Omnitech Infosolutions. The research firm has maintained the fundamental grade of 3/5 to the company in its June 28, 2012 report.
March 13, 2019 / 13:35 IST
CRISIL Research has come out with its report on Omnitech Infosolutions. The research firm has maintained the fundamental grade of 3/5 to the company in its June 28, 2012 report.
Omnitech Infosolutions Ltd (Omnitech) reported a net loss of Rs 11 mn due to high interest cost, on the back of increase in working capital debt for subsidiaries, and tax rate of ~72% this quarter as the company booked deferred tax liability. Accordingly, the results were below expectations. Europe and Asia Pacific subsidiaries continued to make losses at the EBITDA level in the quarter. Also, increase in competition in the domestic market is putting pressure on margins. We have reduced FY13 revenue estimate by 4% and earnings estimate by ~29% due to higher depreciation and interest cost. The capital expenditure and working capital remain key monitorables. We maintain the fundamental grade of 3/5.Q4FY12 result analysis (consolidated)
• Consolidated revenues remained flat q-o-q (29% y-o-y) at Rs 1,319 mn. Standalone revenue grew by 2.6% q-o-q. However, revenue contribution from subsidiaries declined by ~9% period q-o-q as revenues from Europe and APAC declined due to closure of some project-based contracts in Q3.• Employee cost declined by 15.6% q-o-q (up 6.5% y-o-y). Cost of goods sold increased by 10.6% q-o-q (~45% y-o-y) despite flat revenue on a q-o-q basis as the company executed system integration contracts at lower margins. As a result, consolidated EBITDA was flat q-o-q (up by 19.8% y-o-y) at Rs 338 mn. EBITDA margin was 25.7% compared to 25.6% in Q3FY12 and 27.6% in Q4FY11. Standalone EBITDA margin declined by 80 bps q-o-q to 31% due to increase in competition.• Interest and finance charges increased by 38.3% q-o-q (244% y-o-y) to Rs 70 mn due to higher debt for funding working capital of the subsidiaries.• Tax rate this quarter was 72% compared to 34.7% in Q3FY12 and ~58% in Q4FY11 as the company booked deferred tax due to asset addition of ~Rs 1.1 bn in the year.• The share of minority shareholders in profit (minority interest) was Rs 56 mn despite EBITDA losses in the subsidiaries. We could not get clarity on this issue.• The company reported a loss of Rs 11 mn compared to a profit of Rs 127 mn in Q3FY12 and Rs 84 mn in Q4FY11. It has declared a dividend of Rs 2.8 per share.• It has proposed to issue 4,18,725 share warrants to promoters and non-promoters at ~Rs 139 per share.Valuations: Current market price has strong upside
We continue to value Omnitech based on the discounted cash flow method. We have rolled forward our model by one year to FY14 and revised the fair value to Rs 199 per share from Rs 254. At the current market price of Rs 123, the valuation grade is 5/5.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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