ICSA India

This week, PN Vijay had made a recommendation for ICSA India. The year-end target was Rs. 1000 .... a 93% rise in invested amount. The company is involved in the business of devising solutions for the energy sector for power, oil & gas firms.

Some points to note -
a) Consistent growth in the EPS over the last 5 quarters - 4.53, 5.49, 5.37, 7.01, 7.13
b) If the company maintains this growth in EPS over the next 4 quarters, we are looking at an year EPS at about Rs. 30.00 which'll calculate to a P/E of 16.5
c) The revenue per quarter has consistently risen from 74.9 crs, 94.8 crs, 101.0 crs, 122.6 crs and 146.2 crs.
d) The consistency in margins is quite unnerving ... 19.8%, 19.2%, 18.2%, 19.0%, 19.6%

For a knowledge intensive company, ICSA's margins are quite strong and the price-earnings is much lower than other organisations. Peer comparison would include a CRISIL (1yr fwd PE : 26; margins : 27%). ICSA is cheaper than CRISIL and a bit more consistent.

ICSA has been eyed by a number of bulk deal clients, however the mutual funds have been keeping away from this scrip. Dont know why!

ICSA definitely seems to have some more stretch from it's current price, especially with the macro-environment (growing penchant for power, oil & gas sector projects) shining on them.

Recommend a BUY ! Rs. 1000 target is possible.