>INFINITE COMPUTER SOLUTIONS (ICICI DIRECT)

Infinite Computer Solutions Ltd (Infinite) is a provider of infrastructure management, intellectual property (IP) leveraged solutions and IT services focused on the telecom, media, technology, manufacturing and healthcare industries. The services offered span from application management, packaged application, independent validation and verification, managed platform & product engineering services.

Large clients aiding growth…

■ Marquee client base
Since inception, the company has maintained its policy of working with global companies. Its performance over the years has been a direct result of growth of its top clients. The company counts Verizon, IBM, ACS, AOL and Fujitsu among its marquee clients. The consistency of its performance is evidenced from the fact that over the past years its top clients have remained the same, even during times of vendor consolidation.

■ Performance delivery during challenging times
The company has seen its revenues grow 44% in FY09 even on the back of the global slowdown, which resulted in the muted performance of the Indian IT industry. Larger peers like Infosys and TCS grew by 30% and 22%, respectively.

■ Domain knowledge
The company has developed domain expertise in the telecom industry. Infiniti has had long-term relations with Verizon. AOL has helped it move from conventional services to higher value-added services like IMS, IP leveraged solutions and convergence among others.

Concerns

• The company derives a high percentage of its revenues (92% in H1FY10) from its top 10 clients and 89% of its revenues from the US geography. Any reduction in spend from top clients could have a material impact on the performance of the company

• CARE has assigned an IPO grade of 2/5, which reflects below average fundamentals compared to listed firms

Valuations
The half yearly annualised EPS for FY10E on post-IPO fully diluted equity works out to Rs 16.8. At the offer price band of Rs 155-165, the IPO is available at 9.2x the lower price band and 9.8x the upper price band of its FY10E annualised post-issue EPS. The stock is reasonably priced from a valuation perspective. We advise our clients to SUBSCRIBE for listing gains.

To read the full report: INFINITE COMPUTER SOLUTIONS