Infibeam Incorporation Ltd. INR 947is trading at EV/Sales (x) of 8x, 5.5x and 3.7x to its FY17E, FY18E and FY19E revenues. Notably, the services segment contributes ~31% to top-line,

KRChoksey Research is also available on Bloomberg KRCS<GO>, ThomsonReuters, Factset and Capital IQ September 26, 2016

India Equity Institutional Research | E-Commerce Initiating Coverage

Infibeam Incorporation Ltd. INR 947

Powering E-Commerce BUY

Infibeam is an e-commerce company, focused on developing successful e-

commerce platforms and ecosystems. In addition to Infibeam.com, a multi-

category B2C e-retail site, through Infibeam BuildaBazaar (“BaB”) e-commerce

marketplace, the company provides a cloud-based, modular, customizable and

scalable technology platform as well as e-commerce infrastructure and logistics

support for a diverse universe of merchants, products and services.

At 44% CAGR, E-commerce is set to become a $ 44 Bn business

opportunity over the next 4 years:

With an e-commerce boom running in India at full-swing, the rate at which the

brick and mortar retailers are transforming to an online platform is unimaginable.

India’s ‘e-tail’ market stood at US$ 7 Bn in 2015 and is expected to grow at a

CAGR of 44% to US$ 44 Bn by 2020. As of FY15, Infibeam’s potential

addressable market, i.e. the organized offline retail market, stands at US$ 46 Bn

(INR 3,082 Bn). This market is expected to grow at a CAGR of 26% between

FY15 to FY20 to US$ 146 Bn (INR 9,782 Bn).

Read More:

E-Commerce Industry Digital Advertizing Industry

Business Model built strategically to drive a profit making e-commerce

company which is cash accretive:

Infibeam operates on a synergistic and integrated business model primarily

divided into two segments – Product business and Services business. The

products business operates on a standard e-retail B2C market place model where

merchants meet users.

Read More:

Business Model Revenue Mix BuildaBazaar.com Value Added Services

Financials

.ooo registry to drive revenue growth under Value Added Services (VAS)

Infibeam is the only company in India to own a Global Top Level Domain (GTLD)

registry, namely “.ooo”. Given the right level of advertising/marketing initiatives,

we believe that this domain can acquire a huge market in the online market

space. The domain registry can act as a smart strategy for acquiring customers

as the .com domain gets concentrated incrementally, customers/merchants will

have to switch to alternative domains to register the name of their choice.

Read More:

Domain Registry Business Payment Gateway Solutions

Upstream and Downstream expansion plans to drive revenue and margin

growth: As of 31st March, 2016 the Company has 6 warehouses and 12 logistic

centers and the company plans to expand to 75 centers within the next three

years at an estimated cost of INR 375 Million. The investment is expected to

result in cost efficiency because as opposed to outsourcing logistics, wherein each

product is transported individually (and therefore bearing a bigger cost), owned

logistics will result in bulk transfers, reduced operational costs and thus improved

margins. The company can also harness additional revenue by offering logistic

services to merchants.

Read More:

Value Added Service Offerings Geographical Expansion Logistics

Solutions - ShipDroid Marketing & Analytics - Odigma

Target Price (INR): INR 1,062

Potential Upside : 12.4%

Market Data

Shares outs (Mn) 53.09

Equity Cap (Mn) 530.9

Mkt Cap (INR Mn) 5,0250.9

52 Wk H/L (INR) 978/431

Vol(No-shares) 824.93

Face Value (INR) 10

Bloomberg Code INFIBEAM IN

Market Info:

SENSEX 28668

NIFTY 8832

Share Price Performance

Share Holding pattern (%)

Particulars Jun16 Mar16 Dec15

Promoters 45.52 45.52 0.00

FIIs 6.97 2.35 0.00

DIIs 2.96 12.36 0.00

Public 44.55 39.77 0.00

Total 100 100 100

Analyst: Mayank Babla

[email protected]

91-22-6696 5429

www.krchoksey.com

91-22-6696 529

91-22-6691 9569

80

120

160

200

Apr-

16

May-1

6

Jun-1

6

Jul-

16

Aug-1

6

Sep-1

6

Sensex Infibeam Inc

mailto:[email protected]

http://www.krchoksey.com/

Infibeam Incorporation Ltd.

2 KRChoksey-Institutional Research

Valuation & Outlook:

We initiate coverage with a BUY recommendation on the stock with a target price of INR 1,062. The stock

is trading at EV/Sales (x) of 8x, 5.5x and 3.7x to its FY17E, FY18E and FY19E revenues. Notably, the services segment

contributes ~31% to top-line, however we believe that this segment holds immense potential. We believe that the

Value Added Services (VAS) such as logistics, payment solutions, warehousing facilities, digital catalogue, cloud

services and analytics services offered by the company dictate the premium over its peers in the E-commerce space.

The VAS offered by the company contribute to Infibeam’s unique selling proposition. We believe that the Indian

consumer market holds a huge opportunity in the E-commerce space as it constantly evolves towards an online

marketplace. With the Government’s Digital India and Smart Cities project, we expect internet access, internet users

and smart-phone penetration to increase at tremendous pace, eventually breaking technological barriers in Tier II &

Tier III cities and Rural India. With increasing access to the internet, we expect the E-commerce market to increase

drastically, thereby expanding the market pie and incumbents’ shares.

We value Infibeam Incorporation Ltd. on SOTP based valuation methodology. Given that Infibeam is the only listed

entity in the domestic markets with no comparable peer in terms of size and offerings, we value the

product/marketplace segment on EV/Sales basis, a prevalent valuation norm for Global Marketplace players. We

assign an EV/Sales multiple of ~5x to Infibeam’s Product Segment FY19E Sales of INR 5,206 Mn to arrive

at a price target of INR 365 per share.

For the distributed marketplace or services segment, we value the segment on EV/EBITDA basis, applying an

EV/EBITDA multiple of 14x to its FY19E Services segment EBITDA of INR 3,118 Mn to arrive at a price

target of INR 697 per share and to arrive at SOTP based price target of INR 1,062.

We have also compared with global peers, i.e. Amazon Web Services, which is trading at 17x FY19E EBITDA and

Shopify, which is loss making at the EBITDA level (USD 19.2 Mn loss as of CY15), we apply only a 20% discount to

Amazon Web Services (AWS) valuation for Infibeam’s Services Segment (BuildaBazaar and VAS) as we believe that

Indian e-commerce market holds robust growth potential vis-à-vis N. American market which is relatively mature and

highly saturated.

Key Financials

YE December (Rs. mn) FY15 FY16 FY17E FY18E FY19E

Net Sales 2,883 3,370 4,619 6,595 9,661

Growth (Y-o-Y) 39.0% 16.9% 37.1% 42.8% 46.5%

EBIDTA -23 218 296 484 693

Growth (Y-o-Y) N.A. N.A. 35.7% 63.5% 43.1%

Net Profit -98 93 220 401 618

Growth (Y-o-Y) N.A. N.A. 137.9% 81.7% 54.1%

Diluted EPS (2.3) 1.7 4.2 7.5 11.6

Growth (Y-o-Y) N.A. N.A. 137.9% 81.7% 54.1%

No of Diluted shares (mn) 43 53 53 53 53

Key Ratios

EBIDTA (%) -0.8% 6.5% 6.4% 7.3% 7.2%

NPM (%) -3.4% 2.8% 4.8% 6.1% 6.4%

RoE (%) -6.6% 2.1% 3.3% 5.8% 8.3%

RoCE (%) -15.6% 1.1% 1.2% 2.9% 4.3%

Tax Rate % -0.1% -0.7% 20.8% 23.0% 23.0%

Book Value Per share (Rs.) 50.0 122.9 127.0 134.6 146.2

Valuation Ratios

P/E (x) 461.0x 193.7x 106.6x 69.2x

EV/EBITDA 172.1x 124.9x 75.6x 51.9x

P/BV (x) 6.5x 6.3x 6.0x 5.5x

Market Cap. / Sales (x) 12.7x 9.2x 6.5x 4.4x

Source: Company, KRChoksey Research



BUSINESS OVERVIEW

Business Model

Infibeam Incorporation Ltd. is an E-commerce

player, providing end to end solutions to merchant

sellers added with digital capabilities in the online

market-place model. The company has several

revenue streams, namely a) infibeam.com which is

in the electronic retail space, b) BuildaBazaar.com –

which facilitates merchants to transform into the

digital market place through it’s own store “e-tail”

platform, 3) Value added service offerings such as

sales & marketing advisory, analytics, Application

Development & Maintenance, Logistic services, Data

Center services, advertising services, payment

solutions, Cloud-based services, amongst others and

c) GTLD - .ooo domain is a dormant but a potential

revenue generating source.

Competitive Edge

The company operates on an integrated and

synergistic business model wherein an merchant

cannot only place products on Infibeam’s online

marketplace, but also create their own store

marketplace through BuildaBazaar.com

The company gains its core competitive edge

through value added services (VAS) such as logistic

& warehouse services, data management &

services, data center services, cloud services, sales

& marketing consultancy application development &

maintenance, digital content management,

payment solutions, etc.

An electronic retail model combined with VAS

makes Infibeam an end-to-end solutions provider

and provides an advantage in such a highly

competitive and concentrated market place.

The company currently owns 6 warehouses and 12

logistic centers and plans to expand this number to

75 centers. These acquisitions should entail cost-

savings and added revenue sources.

Financial Structure Infibeam Incorporation is a debt free company with

cash of INR 5181 Mn on it’s books.

The company recorded a combined EBIT margin of

17% as of Q1FY17. PBIT of services segment stood

at INR 178 Mn with a PBIT margin of 55%. RoE

and RoCE were recorded at 2.1% and 2.4%

respectively for FY16.

The company is expected to incur capex to the

tune of INR 275 Mn over FY17E and FY18E purely

from internal accruals and IPO proceeds.

Debtor days were recorded at an average 42 days

over the last 3 years.

Company Brief

Infibeam is an e-commerce

company which has developed

the marketplace & distributed

marketplace model using on an

ERP/SaaS basis and building

Value Added Services for end to

end delivery of order so received

on its SaaS platform. In addition

to Infibeam.com, a multi-

category B2C e-retail site,

through Infibeam BuildaBazaar

(“BaB”) e-commerce

marketplace, the company

provides a cloud-based, modular,

customizable and scalable

technology platform as well as e-

commerce infrastructure and

logistics support for a diverse

universe of merchants, products

and services



Key Competitors

Flipkart, E-Bay, Snapdeal, Amazon.in, Jabong, &

Myntra

Marketplace Owner Valuation ($ Bn)

Flipkart

Snapdeal

Jabong

Myntra

Infibeam

$9.3 Bn

$6.5 Bn

$0.07 Bn

$0.3 Bn

$0.7 Bn

Source: Indian Express, Livemint, KR Choksey Research

Industry Revenue

Drivers

India’s GDP is estimated at approximately US$2.1

trillion in fiscal 2015, of which private consumption

will constitute 57%. Out of the total private

consumption in the economy, almost 50% is

comprised of the retail segment. The size of the

Indian retail segment is expected to increase from

US$ 585 billion in 2015 to US$ 2,065 billion in 2025.

In 2007, e-tail in China accounted for 0.7% of total

retail market which has grown to 10.1% in 2014

driven by constraints of brick & mortar organized

retail. The demand and consumption trend in India

will mirror that of China. Due to the inherent

challenges with B&M retail in India, e-tail will grow

at an even faster pace. Faster adoption of

technology and consumption of mobile technology

will lead to rapid growth of e-tail. India is expected

to go the China way in terms of web-only

participants dominating the online market.

Factors such as a) Growth of digital penetration, b)

Growth of internet habitual customers and c)

Limitation of brick and mortar formats to grow will

be major industry revenue drivers going ahead.

Current business

strategy

(1)Enhance logistics and warehousing infrastructure

(2)Technological product innovation

(3)Offering end-to-end solutions right from

launching the merchant on the e-tail market and

cloud based infrastructure to aftermarket services

such as ADM, S&M consultancy, data management,

analytics, etc.




Investment Rationale:

Suitable business mix to ride the domestic E-Commerce boom:

Infibeam operates on a synergistic and integrated business model primarily divided into two segments – Product

business and Services business. The products business operates on a standard e-retail B2C market place model where

merchants meet users. However, the services business (under BuildaBazaar.com brand name) adds a scintillating

refinement to the traditional e-commerce model. The platform used by the merchants is provided on cloud wherein it

offers the ease of doing business at an affordable cost. It is a unique value proposition for the local and global

merchants to use this cloud base platform and get online market place instantaneously with ready-to-sell products on

the web. Under this model, the company offers various subscription plans across price points to suit the requirement

of merchants operating at different scale. Service business (BuildaBazaar) currently contributes 31% to Infibeam’s

top-line whereas products business (Infibeam.com) contributes 69%. Services business is also a high margin business

with an EBITDA margin of ~55% as of Q1 FY17.



69%

31%

Product Revenue Service Revenue

Infibeam.com

E-commerce website providing 40+ categories of products, 8.2 Mn users and more than 5,000

merchants selling online.

BuildaBazaar.com

Infibeam's platform which enables a company to transform into a digital

enterprise. More than 50,000 merchants have adopted this

platform

Value Added Services (VAS)

Infibeam Logistics - Logistic Services

ODIGMA - Busiess Analytics Services

NSI Infinium Global - Payment Solutions

Infibeam Incorporation Ltd. Service Offerings



Unique business mix a sets Infibeam apart from other E-commerce players

Apart from offering e-commerce services and an online market-place for merchants to sell products on their own store front, the platform integrates with many third party services, like payment solution provider, designers, loyalty solution providers that essentially offers merchants a one-stop solution. Additionally, Infibeam has a captive network of total 6 warehouse and 12 logistics centers. We expect this investment into logistics and warehouse centers to

result in cost efficiency (vis-à-vis outsourcing) and a potential source of revenue in the future. The company also plans to roll-out a ‘mobile ad framework’ for as a service offering wherein the merchants can use the framework to publish ads across other merchants. We believe that the services offered by Infibeam make it a one stop shop for 360 degree solutions to a merchant.

Managed market place model provides immense cross-selling opportunities for Infibeam

We believe that Infibeam’s business mix offers tremendous cross-selling opportunities as merchants who register to sell their products on Infibeam.com have a tendency to enroll on BuildaBazaar.com to have their own online storefront. On the other hand, Infibeam’s integrated set of offerings include logistic & warehousing facilities, payment solutions, mobile app framework, etc., which reduce the merchant’s effort of having several points of contact for

different processes. This integrated set of offerings is Infibeam’s Unique Selling Proposition and places the company in an operating quadrant which is different from the other E-commerce companies. Infibeam’s technology enables it to effectively offer its services across multiple media, channels and customer interfaces including digital downloading and streaming services, and providing application framework solutions for supply chain and inventory management. The company’s hosting and technology platform incorporates mobile applications, digital product catalogue, content management, promotions handling, access to payment gateways, as well as inventory and logistics management, and

is capable of being integrated into the customer’s IT infrastructure and third party configurable software. As a cloud based e-commerce platform, the BaB Marketplace ensures significant IT related infrastructure and personnel costs savings as well.

Services provided across the B2B and B2C value chain

We are particularly impressed by Infibeam’s presence across the value chain, i.e. B2C and B2B, as it pushes the

merchant’s products across various platforms which in turn increases the Average Revenue per Supplier/Merchant. We

have analyzed a few cases wherein the merchant has availed services from BuildaBazaar.com as well as listed it’s

products on Infibeam.com to exemplify the cross-selling possibilities present in the business.

Merchant who avails service from BuildaBazaar.com, can automatically sign up on Infibeam.com to sell products

Merchant who sells on Infibeam.com, has a high probability of availing services from BuildaBazaar.com to have it's own storefront.

HiDesign

Manglam Jewelers

Infibeam.comBuildaBazaar.com

HiDesign is a design house manufacturing and retailing fashionable leather goods. HiDesign is a leading example of the immense cross-selling potential that Infibeam holds. Hidesign has availed digital and E-commerce services as a merchant from BuildaBazaar.com and has products listed on Infibeam.com as well. Manglam Jewellers is another example of a merchant who is registered on both BigaBazaar.com (with it’s own storefront) and Infibeam.com as well. This format is the

primary reason why Infibeam enjoys a unique position in the E-commerce industry. Infibeam not only benefits from earnings Set-up costs and monthly charges on BuildaBazaar.com, but also from earnings from Transaction charges on products sold through infibeam.com.



GCMMF contract exemplifies Infibeam’s presence across value chain

In Q1FY17, Infibeam signed an agreement with Gujarat Cooperative Milk Marketing Federation (GCMMF) for

developing an ‘online and mobile’ framework to enable selling Amul products “direct to home”. This agreement is a

primary example of Infibeam’s presence across the B2B and B2C value chain. GCMMF’s online framework allows a

customer to place an order directly to the company (B2C), which is then processed and forwarded to a Distributor,

Wholesaler, Retailer/Point of Sale (B2B), which in turn is delivered to the Customer.


Saudi Telecom Authority deal to unlock value through international presence and off-shore centric business model

In Q1FY17, Infibeam has announced that the company’s technology platform has been signed up by Saudi Telecom

company to build a next generation mobile experience “Jawwy”. We believe that an entry into the middle eastern zone

is huge positive for the company and can result in a ‘snow-balling effect’ for the company in terms of merchant

acquisition. Infibeam, in line with its target of international presence, has opened a subsidiary in Dubai and will

continue to look for international growth opportunities aggressively in the coming quarters. We are very optimistic

about the company’s focus on an off-shore centric model and believe it to be margin accretive in the longer term

primarily due ease of replicating the BuildaBazaar.com and Value Added Services infrastructure without significant

costs and investment.

GCMMF

"Amul"Distributor Wholesaler Retailer Customer

Customer places order on

GCMMF's online framework -example of B2C framework

Product moves through the

supply chain and facilitates B2B framework



Value added services enhance customer experience and acquisition

Source: Annual Report, KRChoksey Research

Infibeam offers a wide range of Value Added Services (VAS) to enhance customer experience improve customer

acquisition.

ShipDroid – Logistics Solutions: Infibeam revamped it’s logistics solutions by implementing Shipdroid, a service

aggregation platform that helps e-commerce merchants integrate with a wide range of courier service providers onto a

single platform. Infibeam currently has 12 logistic centers and 6 warehouses. The company plans to install a total of

75 logistic centers which will expand delivery reach to 16,000 pin codes across India. Infibeam’s distribution footprint

(post-execution of logistics infrastructure) will provide a significant competitive advantage that will not be easily

replicated by competitors. As Infibeam increases it’s distribution footprint, it not only improves its shipping time and

costs, but also increases sellable product categories (86 product categories as of FY16) that require shorter shipping

time (eg. Packaged foods, groceries, etc.). Logistic and warehouse centers will also serve to improve last mile

connectivity for Infibeam, which can then be converted to additional source of revenues such as Amazon’s Prime

Service (2 day and same day delivery for a certain fee per annum), Amazon Fresh (same day and early morning

delivery for $299 per annum), etc. We believe that Groceries segment represents a major opportunity for Infibeam as

a result of higher reach and shorter delivery times.

Source: BuildaBazaar website, ShipDroid Website, KRChoksey Research

Odigma Consultancy Infibeam Logistics

Sine Qua Non SolutionInfibeam Digital Entertainment

Infibeam



As indicated below, ShipDroid offers various logistics solutions and benefits as shown below:

Source: BuildaBazaar website, ShipDroid Website, KRChoksey Research

Payment Gateway Solutions

Infibeam’s strong IT infrastructure along with Payment Gateway solutions and fulfillment services facilitates acquisition

of new suppliers and addition of new products on the e-tail website. Infibeam acquired a stake in CC Avenue, a

leading payment solutions provider company in 2016 (for INR 600 Mn) and plans to integrate the payment gateway

system for customers shopping on both BuildaBazaar and Infibeam. We believe CC Avenue to bring considerable

synergies in terms of payment solutions for Infibeam as well as added revenue source as the company already caters

to brands like PayTM, MakemyTrip, Clear Trip, McDonald’s, SnapDeal, Myntra, Jabong, etc. The company offers an

array of payment solutions such as 200 payment options, multiple currency processing, Mobile Payments, Faster

Checkouts, etc. Currently, CC Avenue offers 2 options, namely Start-up Pro (Zero Set up fee but Transaction Discount

Rate (TDR) vary between 2% - 4%) and Privelage (INR 30,000 set up fee and negotiable TDRs).

Marketing & Analytics – Odigma Consultancy Solutions: Infibeam, through it’s 100% subsidiary Odigma

Consultancy, also provides consultancy in e-commerce digital marketing on social media and other interactive

channels. Odgima also focuses on optimizing reach as well as conversions on digital spending for merchants using

analytical data driven techniques. Revenue flows for Odigma are either bundled with merchant revenue share or based

on charges per click, sale or impression. Odigma Consultancy offers solutions under 4 branches with its respective

sub-branches, namely: a) Digital Marketing & Customer Acquisition – Social Media, Video Creation & Marketing, E-mail

marketing, power affiliations, b) Omni Channel Strategy and Solutions – Website Development, Brand Campaigns,

Social CRM, c) Mobile App Development – Apps for Mobiles, App Concepts & Sector Specific Apps d) Digital Media

Distribution – Brand Campaigns, Cross Device Distribution of Content & Strategic Alliances with Media Concepts

Source: Odigma Consultancy Solutions Website, KRChoksey Research

Features Offered (from left to right):

1. No Multiple Courier Agreements

2. Automatic & Smart AWB

management

3. Seamless BuildaBazaar migration

4. One-click pick up generation

5. Easy to use shipping pipeline

6. Single Tracking interface for all couriers

7. Economical

8. Unified Cash on Delivery

Support

9. Best Post-Shipping Support

10. Easy Accounts/Billing Management

11. No minimum commitments



Expect Value Added Services to report profits post FY17E

YE March Infibeam Logistics Odigma Consultancy Solutions Sine Qua Non Solutions

Particulars (Rs. Mn)

Shareholding (%) 100% 100% 100%

Reserves & Surplus (3.6) (4.5) (17.8)

Total Assets 104.6 18.5 1.3

Total Liabilities 108.0 22.8 18.8

Revenue 49.7 65.4 1.3

Profit/(Loss) before Tax (3.7) (5.6) (2.6)

Tax Expense 0.0 (1.7) 0.0

Profit/(Loss) after Tax (3.8) (3.9) (2.6)

As of FY16, Infibeam Logistics recorded a top-line of INR 49.7 Mn and Loss of INR 3.8 Mn; Odigma Consultancy

reported a revenue of INR 65.4 Mn and loss of INR 3.9 Mn. Sine Qua Non Solutions, which manages a portion of

payment gateway solutions for Infibeam, recorded a top-line of INR 1.3 Mn and Loss of INR 2.6 Mn.

Management is confident that Infibeam subsidiaries will turn profitable post FY17E largely on account of robust macros

in the Digital marketing/advertising and E-commerce space to result in higher demand for advertising consultancy

services and payment gateway solutions. Digital advertising (specifically search advertising and social media

advertising components) as a component of total advertising is expected to increase from 9.9% in 2015 to 12.7% in

2016 and is expected to outperform Print Media advertising (which is expected to drop from 32.4% as percent of total

advertising in 2015 to 29.7% in 2016) growth rates.

We believe BuildaBazaar and VAS to be star performers BuildaBazaar is Infibeam’s cloud-based market place providing a comprehensive, modular, customizable and scalable

e-commerce infrastructure platform that can support a diverse universe of merchants, products and services. It offers

a plug-and-play, modular and customizable online storefront and e-commerce gateway service for merchants

registered on the BuildaBazaar marketplace platform. We believe that the Infibeam BuildaBazaar platform service is

particularly relevant to small and medium sized merchants with limited access to cost-effective e-commerce solutions.

As of Q1FY17, BuildaBazaar has 57,482 registered merchants who are actively operating on the marketplace. We

believe that BuildaBazaar.com is a prime factor which differentiates it from other e-commerce players largely because

Infibeam provides integrated services and is a one-stop shop for merchants. Additionally, we believe that

Infibeam.com provides immense cross-selling opportunities towards BuildaBazaar.com where merchants can not only

showcase their products on a marketplace but also on their own online store. Apart from assisting in launching the

merchants on a cloud-based market place, Infibeam also provides value added services (VAS) such as payment

solutions, logistic services, sales & marketing consultancy and data centers. We believe that Infibeam’s integrated and

complete set of solutions is the major differentiating factor in the e-commerce space.



BuildaBazaar offers multiple plans to meet merchants’ needs

Infibeam charges it’s merchants on three levels, namely a) Set up charges, b) Registration charges c) Charges on

each transaction that occurs through the online portal. The company offers various subscription plans based on size

and requirement of the merchants. Following are the list of subscription plans:


Silver: This is the most basic subscription plan with a subscription-cum-commission model. There is no set up

fees. The maximum number of products that may be listed is low and is aimed at merchants operating on a

small scale.

Gold: This plan includes several attractive features such as cash on delivery, international shipping, Facebook

Connect and cross selling widgets. The maximum number of products that may be listed is higher and is

aimed at merchants operating on a medium scale.

Gold Plus: This is a high-end plan with only subscription fees but no transaction commission. A large number

of products can be listed. In addition to the features available on the Gold plan, this plan offers all social plug-

ins and also offers SMS notification, advanced design widgets etc.

Platinum: This is our premium plan and comes with several advanced features such as ERP integration and

digital marketing. There is no maximum limit on the number of products that can be listed under this plan.

Features and options under this plan are customised in line with the merchant’s requirements and accordingly

a quote is provided to the client.



Six Pillars of Growth Strategy

In order to maximize revenue and profitability, the company has formulated 6 growth strategies, i.e.

Enhance Logistics Infrastructure – The Company is on track to expand the logistic and warehouse

infrastructure to 75 centres over the next 2 – 3 fiscal years, which in turn would improve top-line performance

and margins as it will expand reach of product deliveries and reduce costs relative to outsourcing logistics.

Technological Product Innovation – Infibeam plans to enhance cloud infrastructure amongst introducing

other technologically equipped value added services

International Expansion – The company has opened up a wholly owned subsidiary in Dubai, in-line with it’s

international expansion plans

Focus on merchant acquisition – Infibeam plans to offer all services under one roof to enable easy

merchant acquisition without cash burn

Drive Customer Growth & Retention – Loyalty programs to retain customers and digital marketing

solutions to drive customer growth.

Increase Merchant Wallet Share – Increase in revenue per merchant by offering multiple value added

services


.ooo framework to gain traction on account of high concentration in .com domain

We believe that Infibeam’s Generic Top Level Domain (GLTD) .ooo holds huge potential in terms of individual and

cross selling opportunity. As the .com is a highly concentrated GLTD, it is expected that merchants will be on the

lookout for other avenues to register the domain name of their choice. Infibeam believes that this is where .ooo

framework comes in. The .ooo GLTD also holds cross selling opportunities as merchants who register their business on

the framework can also register on BuildaBazaar.com. The company is spending towards building out data centre

infrastructure which allows it to provide the registry at a much lower marginal cost to the subscribers and as a result it

becomes a great tool for the company whereby merchants can select what they want to have in terms of the URL and

use other frameworks optionally to decide whether they want to build out their own online e-commerce presence

using the company’s infrastructure.

Growth

Enhance Logistic

Infrastrucutre

Technological

Product Innovation

International

Expansion

Focus on Merchant

Acquisition

Drive Customer Growth & Retention

Increase Merchant

Wallet Share



Digital advertising network to be rolled out in the next 4 quarters

In Q1FY17, the company has planned on rolling out a digital advertising framework which is currently handled by 3rd

party vendors. The company plans on using the existing infrastructure, merchant data, analytics, information and

price conversions and build out, purchase and deploy such services. The company expects to cannibalize the value

given to 3rd party vendors for providing digital marketing services to merchants registered on infibeam.com or

buildabazaar.com.

India Ad Spends (USD Bn) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

India 5,075 5,310 5,733 6,528 7,565 8,793 10,174 11,700 13,732 15,824

Television 2,111 2,198 2,329 2,636 3,131 3,672 4,230 4,836 5,626 6,435

Internet 197 321 432 601 846 1,184 1,639 2,181 2,939 3,768

Search 104 136 185 264 366 486 633 816 1,060 1,380

Display 81 107 126 146 179 213 252 299 357 420

Social 6 43 78 139 229 386 611 860 1,212 1,497

Online Video 6 17 24 31 47 72 116 177 280 440

Total Mobile 8 23 55 125 249 462 799 1,221 1,860 2,578

Other - 17 19 22 25 27 28 29 30 30

Source: Bloomberg, Company, KRChoksey Research

We hold an extremely positive view on Infibeam’s plans of entering the digital marketing space in the next four

quarters on account of robust macros. Total ad spends in India are expected to grow at a CAGR of 16% between 2015

and 2020 to USD 15.8 Bn (current USD 10.1 Bn). Moreover, Ad spends on the internet is expected to grow at 35%

CAGR between 2015 to 2020 to USD 3.8 Bn (from current USD 0.8 Bn). Infibeam’s digital marketing platform will not

only hold positive spillover effects for its BuildaBazaar.com but also hold immense potential on a standalone basis in

our views.

Infibeam suitably placed in the operating model matrix Infibeam operates under a ‘managed marketplace’ model wherein the website is a listing platform for the vendor but

the logistic/product quality/ packaging is managed by the e-tailer. The advantages associated with this approach include no capital/ space tied up in inventory, higher control over quality of the product and gross margins higher than the ‘pure marketplace’ model. Moreover, with Value Added Services offered by Infibeam means that it offers a complete package of solutions for merchants. Flipkart and Amazon work under a Pure Marketplace operating model whereas Snapdeal and Jabong operate on Managed marketplace model. We also believe that as and when the company starts adding logistics and warehouses facilities, revenues will shoot up as a result of higher distribution and delivery capabilities and margins will improve vis-à-vis an outsourced logistics model.




Expect robust growth in merchants/users on sound micro and macro related factors

Source: Company, KRChoksey Research Source: Company, KRChoksey Research

The merchant base for Infibeam stands at 57,482 as of Q1FY17, we expect the merchant base to grow to ~1,75,000

by FY18E primarily on account of limitations of the ‘brick & mortar’ model, trend amongst small and mid-sized

merchants to ‘sell online’ and strong industry fundamentals. On these lines, we also expect Infibeam.com’s user base

to increase from 8.1 Mn currently to 10.7 Mn by FY18E.

Robust top-line momentum… Higher services revenue contribution to improve margins


Expect Services revenue contribution to increase to 46%


54

87

17

50

20

40

60

80

100

120

140

160

180

200

FY16 FY17E FY18E

Th

ou

san

ds

No. of Merchants (BuildaBazaar.com)

8.1 9

.4 10

.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

FY16 FY17E FY18E

No. of Users (Infibeam.com) (Units Mn)

2,0

73

2,8

83

3,3

70

4,6

19

6,5

95

9,6

61

37%39%

17%

37% 43%

46%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

2,000

4,000

6,000

8,000

10,000

12,000

FY14 FY15 FY16 FY17E FY18E FY19E

Total Revenue(Rs Mn) Revenue Growth %

-204

-23

218296

484693

6% 6%7% 7%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

-300

-200

-100

0

100

200

300

400

500

600

700

800


EBITDA EBITDA Margin (%)

-260

-98

93 220 401

618

3%

5%6% 6%

-15%

-10%

-5%

0%

5%

10%

-400

-300

-200

-100

0

100

200

300

400

500

600

700


Net Profit Net Profit Margin (%)

85

%

77

%

69

%

69

%

62

%

54

%

15

%

23

%

31

%

31

%

38

%

46

%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Product Revenue (Infibeam.com) Service Revenue (BuildaBazaar)



We expect Infibeam’s top-line to grow at ~42% CAGR between FY16 and FY19E to INR 9,661 Mn based on a broad range of micro and macro related factors:

Micro:

Additional revenue streams, namely:

o Digital Marketing segment expected to be rolled out by H2FY17

o Business Analytics

o Cloud platform

o Payment solutions

Improved product offerings and increase in product lines due to higher distribution capacity and last mile

connectivity

Macro:

Robust growth in the e-commerce space

Better internet access on account of Digital India and Smart Cities projects

Increase in internet penetration to 50% - 60% of population by 2020 (from current ~40%)

Higher penetration of smart-phones (expect smartphone penetration to increase to a minimum of 30% by

2020) from current 22%).

We estimate EBITDA margins to improve by 100 bps by FY19E to ~7% as contribution from services revenue, which is

a high EBITDA margin business (~55%), is estimated to increase from 31% in FY16E to 46% by FY19E. We believe

that there is immense scope for margin expansion post FY18E as the company executes it’s IPO plan of 75 logistics

and warehousing centers, thereby reducing reliance on outsourced logistics. We expect an EBITDA and Net Profit of

INR 693 Mn and INR 618 Mn respectively by FY19E.



Macro-economic Factors

Business mix to gain scale on the back robust growth in E-commerce industry

Private consumption constitutes approximately 57% of total GDP (~$2.1 trillion in FY15) in India. Out of the total

private consumption in the economy, almost 50% is comprised of the retail segment. The size of the Indian retail

segment is expected to increase from US$ 585 billion in 2015 to US$ 2,065 billion in 2025. The retail segment

comprises of the merchandise segment and the services segment. The services segment includes food services,

beauty and health and fitness. The merchandise and services segments are expected to increase from US$ 488 billion

and US$ 37 billion in 2015 to US$1,857 billion and US$208 billion in 2025 respectively. The share of the merchandise

segment constitutes 93% of the total retail whereas services segment constituted 7% of the total retail segment in

2015. However, it is expected that the share of merchandise segment will fall to 90% in 2025 and that of the services

segment will increase to 10%.


Infibeam, with its all round services and presence in merchandise business, is expected to ride the Indian e-commerce

growth story through and through. Going ahead, we expect the services revenues to outperform the product business,

given the highly competitive product business industry in India. We also expect factors like increase in internet access,

growth of internet users and higher penetration of smarphones to boost industry growth. Digital adoption is playing

the role of a key enabler for e-tailing’s growth in India. India’s online retail will grow from the current 0.7% of the

total retail market to 3-4% of total retail by 2020.

479968

2125

46

132

375

0

500

1000

1500

2000

2500

3000

FY14 FY20 FY25

US

D $

Bn

Traditional Organized

488

1011

1857

37

89

208

0

500

1000

1500

2000

2500

FY14 FY20 FY25

US

D $

Bn

Merchandise Services

273495

888252

605

1177

0

500

1000

1500

2000

2500

FY14 FY20 FY25

US

D $

Bn

Rural Urban

FY14

$1.08 Tn

FY20

$2.36 Tn

FY25

$4.42 Tn

Private Consumption




As of June 2016, the wireless subscriber base stands at 1033 Mn, of which merely 371 Mn users have access to mobile

internet. Additionally, smartphone user base stands at 220 Mn in FY16, which is ~22% of the wireless telephone

connections. Number of Broadband connections (>256 kbps browsing speed) is as low as 131 Mn as of 2015.

The number of smartphone users in India is estimated to grow at a CAGR of 35% in the next 6 years. Given that 60%

of online sales are placed through smartphones and that smartphone penetration is expected to increase to 440 Mn by

2020 from 220 Mn currently, there is a huge potential for the e-tail market to grow. Consequently, we expect online

shoppers to increase from 35 Mn currently to 190 Mn by 2020.

Moreover, we expect Govt. initiatives such as Digital India and Make in India to promote internet access and internet

penetration through investments in Wi-fi hotspots, new entrants and consolidation in the telecom operator space and

increasing levels of education in the country.

Even though e-commerce is estimated to be a high growth area, we expect immense pressure in the product business

as competition increases and incumbents burn cash in the short term. In the longer term however, as the market size

grows and incumbents settle in their respective market pockets, we expect consolidation in the market to neutralize

competition and stabilize margins.

With e-commerce industry experiencing a nuclear-like boom in India since triggering the growth phase in 2007 and

limitations in the ‘brick & mortar’ model, every merchant is in the race to ‘get online’. Infibeam’s BuildaBazaar seems

to be well placed to exploit this opportunity, especially in the small to medium sized merchants category.



Long term industry outlook:

We believe that the current situation in the E-commerce space translates into higher supply than demand, resulting in

the evidential intense competition amongst the big firms (Flipkart, Amazon, SnapDeal, etc.). In the longer term, as

the e-commerce industry expands pan-India and the market grows bigger in size, we expect the intense competition

and price wars in the E-commerce space to normalize and thereby reducing pressure on realizations.

Evolution of e-tail in India:

2000 – 2009:

o Initial high growth phase with entrance of several players in the e-commerce space

o High discounts as a % of GMV, i.e. 35-45%

o High ad spends and aggressive advertising to increase customer acquisition

o Huge Investment levels to increase market penetration

o Incumbents generally loss-making on the bottom-line due to high discounts and ad spends

o Growth rates begin to pick up

2009 – 2014:

o Average Discounting offered across players as a % of GMV was 25-35%, which is 5-10% lower than in

the previous few years.

o High ad spends continue in order to sustain customer retention

o Growth rates at colossal levels as evident in the graph below – 72% CAGR

o Incumbents continue to make losses on the bottom line as deep discounts continue in order to tackle

competition

2014 – 2022:

o Average discounts expected to come by a further 10-15% over the next few years

o Slower top-line growth rate

o Focus on bottom-line increases

o Incumbents typically start breaking even or making small profits

o Consolidation increase – High levels of M&A activity

Source: The E-tailing revolution in India report by Red Seer Consulting on www.redseerconsulting.com , Company, KRChoksey Research

As displayed in the graph above, expect e-commerce companies’ CAGR to reduce from 72% in 2009-14 to 47% in

2014-22. Eventually, we believe that the industry will continue consolidation and E-commerce players will settle in

their respective pockets of the market with

http://www.redseerconsulting.com/



Peer Comparison

Company Name FY Infibeam (INR Mn)

eBay (USD Mn)

Alibaba (USD Mn)

Amazon (USD Mn)

Shopify (USD Mn)

Net Sales

FY16 3,370 8,592 15,912 1,07,006 205

FY17E 4,619 8,950 22,771 1,36,790 367

FY18E 6,595 9,358 29,266 1,67,151 525

EBITDA Margin

FY16 6% 32% 36% 9% -7%

FY17E 6% 39% 45% 11% 0%

FY18E 7% 39% 44% 13% 3%

EPS (Currency/Share)

FY16 1.7 1.6 1.5 1.3 -

FY17E 4.2 1.9 3.3 10.8 -0.1

FY18E 7.5 2.1 4.2 16.2 0.0

EV/Sales (x)

FY16 11.1 3.9 11.9 3.0 9.1

FY17E 8.0 4.0 10.4 2.6 10.1

FY18E 5.6 3.8 8.1 2.2 7.0

EV/EBITDA (x)

FY16 172.1 11.5 33.7 37.1 -177.9

FY17E 124.7 10.2 23.0 23.3 4557.5

FY18E 75.7 9.7 18.3 17.2 233.4

Source: Company, Bloomberg, KRChoksey Research

Domestic Peers:

As of FY15, Flipkart and SnapDeal were trading at an EV/GMV(Sales) multiple of ~3x/1.4x, respectively. Going

ahead, industry estimates expect Flipkart’s GMV to increase from USD 4.5 Bn to USD 8 Bn, which translates

into a lower multiple.

Although Infibeam operates at high valuations (viz Flipkart & Snapdeal), we believe that factors such as

differentiated business model, no cash burn, high cross-selling opportunities and immense potential for

BuildaBazaar.com dictate premium valuations.

International Peers:

On an average, Amazon receives an EV/Sales multiple of 0.8–0.9x FY18E Sales while Amazon Web Services

receives an EV/EBITDA multiple of 15-16x FY18E EBITDA.

We apply only a 20% discount to Amazon Web Services valuation (17x FY19E EBITDA) for Infibeam’s Services

Segment (BuildaBazaar and VAS) as we believe that domestic e-commerce market holds robust growth

potential vis-à-vis N. American market which is relatively mature.



Valuation & Outlook:

We initiate coverage with a BUY recommendation on the stock with a target price of INR 1,062. The stock

is trading at EV/Sales (x) of 8x, 5.5x and 3.7x to its FY17E, FY18E and FY19E revenues. Notably, the services segment

contributes ~31% to top-line, however we believe that this segment holds immense potential. We believe that the

Value Added Services (VAS) such as logistics, payment solutions, warehousing facilities, digital catalogue, cloud

services and analytics services offered by the company dictate the premium over its peers in the E-commerce space.

The VAS offered by the company contribute to Infibeam’s unique selling proposition. We believe that the Indian

consumer market holds a huge opportunity in the E-commerce space as it constantly evolves towards an online

marketplace. With the Government’s Digital India and Smart Cities project, we expect internet access, internet users

and smart-phone penetration to increase at tremendous pace, eventually breaking technological barriers in Tier II &

Tier III cities and Rural India. With increasing access to the internet, we expect the E-commerce market to increase

drastically, thereby expanding the market pie and incumbents’ shares.

We value Infibeam Incorporation Ltd. on SOTP based valuation methodology. Given that Infibeam is the only listed

entity in the domestic markets with no comparable peer in terms of size and offerings, we value the

product/marketplace segment on EV/Sales basis, a prevalent valuation norm for Global Marketplace players. We

assign an EV/Sales multiple of ~5x to Infibeam’s Product Segment FY19E Sales of INR 5,206 Mn to arrive

at a price target of INR 365 per share.

For the distributed marketplace or services segment, we value the segment on EV/EBITDA basis, applying an

EV/EBITDA multiple of 14x to its FY19E Services segment EBITDA of INR 3,118 Mn to arrive at a price

target of INR 697 per share and to arrive at SOTP based price target of INR 1,062.

We have also compared with global peers, i.e. Amazon Web Services, which is trading at 17x FY19E EBITDA and

Shopify, which is loss making at the EBITDA level (USD 19.2 Mn loss as of CY15), we apply only a 20% discount to

Amazon Web Services (AWS) valuation for Infibeam’s Services Segment (BuildaBazaar and VAS) as we believe that

Indian e-commerce market holds robust growth potential vis-à-vis N. American market which is relatively mature and

highly saturated.



Annexure:

Management Team:

Management Team

Name Designation Comments

Vishal A. Mehta

Managing Director

Holds a master of engineering degree in Operations Research and Industrial Engineering from Cornell University, USA and a master of science degree in Management of Technology from the Massachusetts Institute of Technology, USA. He has over 10 years of experience in the field of IT. Prior to joining our Company, he has worked at Amazon.com Holdings Inc. and Amazon Global Resources Inc. for five years

Hiren Padhya

Chief Financial Officer

He holds a bachelor’s degree in commerce from H.L. Commerce College, Gujarat University. He is a member of the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India. Prior to joining our Company, he worked at Rubber King Tyres India Private Limited as its Chief Financial Officer for about a year, at Duravit India Private Limited as General Manager, Finance and Accounts, for approximately two years, at Adani Exports Limited as a Senior Manager for over a year, at Jubilant Infrastructure Limited as Financial Controller for a year

Vijayakumar Subramanian

Chief Information

Officer

He holds a bachelor’s degree in technology in Mechanical Engineering from the Indian Institute of Technology, Madras and masters’ degrees in science and computer science from the University of Illinois, Urbana-Champaign, USA. Prior to joining our Company, he worked at Amazon.com, Inc for a period of five years and at NIGPL for a period of eight years.

Shyamal Trivedi

Company Secretary

and Compliance

Officer

He holds a master’s degree in commerce and a bachelor’s degree in law from the Gujarat University. He is a qualified company secretary and is a fellow member of the Institute of Company Secretaries of India. Prior to joining our Company, he had worked at Vivro Financial Services Private Limited and Axis Bank Limited.

Ajay Chandra

Chief Technical

Officer

He holds a master of science degree in Software Engineering from Bharathiar University, Coimbatore. He has over 12 years of experience in software development and engineering. Prior to joining our Company, he worked at Amazon Software Development Centre (Bangalore) Private Limited and Intel Technology India Private Limited.

Board of Directors

Board of Directors

Name Designation

Vishal Mehta Managing Director

Ajit Mehta Non-Executive Chairman

Malav Mehta Non-Executive Director

Roopkishan Dave Independent Director

Keyoor Bakshi Independent Director

Vijay Lakshmi Sheth Independent Director Source: Company, KRChoksey Research



Profit & Loss A/c

Profit & Loss A/c


Net Sales 2,883 3,370 4,619 6,595 9,661

Growth % 39.0% 16.9% 37.1% 42.8% 46.5%

Total Revenue 2,883 3,370 4,619 6,595 9,661

Less:

Increase/Decrease in Stock 37 115 -20 33 48

Cost of Services & Raw Materials 2,263 2,437 3,234 4,616 6,762

Employee Cost & Related Expenses 211 277 376 571 853

Miscellaneous Expenses 468 552 693 956 1,401

Total Operating Expenditure 2,906 3,151 4,323 6,111 8,968

EBIDTA -23 218 296 484 693

Growth % N.A. N.A. 35.7% 63.5% 43.1%

Less: Depreciation 131 175 196 220 279

EBIT -154 43 100 264 413

Growth % N.A. N.A. 134.4% 518.3% 312.9%

Interest Paid 14 11 7 7 7

Non-operating Income 70 55 186 264 396

Profit Before tax -98 86 279 520 802

Tax 0 -1 58 120 184

Net Profit -98 93 220 401 618

Adjusted Profit -98 93 220 401 618

Reported Diluted EPS Rs (2.3) 1.7 4.2 7.5 11.6

Growth % N.A. N.A. 137.9% 81.7% 54.1% Source: Company, KRChoksey research

Balance Sheet: Balance Sheet (Consolidated)

YE December( Rs. mn) FY15 FY16 FY17E FY18E FY19E

Liabilities

Equity Capital 426 531 531 531 531

Reserves & Surplus 1,701 5,992 6,213 6,613 7,231 Equity 2,127 6,523 6,744 7,144 7,762 Net Worth 2,127 6,523 6,744 7,144 7,762 Net Deferred tax liability/(Asset) 13 17 14 20 19 Total Loans 50 0 0 0 0

Capital Employed 2,190 6,540 6,758 7,164 7,781 Assets Gross Block 815 1,091 1,229 1,366 1,436 Less: Depreciation 305 479 675 895 1,174 Net Block 510 612 554 471 262 Capital WIP 262 254 348 496 727

Current Assets Sundry Debtors 331 452 569 813 1,191 Cash and Bank Balance 602 5,182 5,801 6,098 6,649 Loans and Advances 156 346 474 677 991 Total Current Assets 1,212 6,218 7,029 7,851 9,218

Less:Current Liabilities & Provisions Sundry Creditors 487 850 1,166 1,649 2,420 Provisions 4 6 6 6 6 Total Current Liabilities & Provisions 491 856 1,172 1,655 2,426 Capital Applied 2,190 6,540 6,758 7,164 7,781

Source: Company, KRChoksey research



Cash Flow

Cash Flows (Consolidated)

YE December (Rs. Mn) FY15 FY16 FY17E FY18E FY19E

PAT (98.0) 92.7 220.5 400.7 617.5

Less: Non Operating Income (69.5) (55.0) (185.9) (263.8) (396.1)

Add: Depreciation 131.0 175.4 195.9 219.9 279.3

Add: Interest Paid 13.7 11.5 7.5 7.5 7.5

Operating Profit before Working Capital Changes (22.8) 224.6 238.0 364.3 508.2

(Inc)/Dec in Current Assets (247.5) (310.8) (245.1) (446.3) (692.5)

Inc/(Dec) in Current Liabilities 73.2 365.0 316.0 482.4 770.9

Changes in Inventory (36.5) (115.0) 53.0 (79.0) (122.6)

Net Cash Generated From Operations (233.6) 163.9 361.9 321.3 463.9

Cash Flow from Investing Activities

(Inc)/Dec in Fixed Assets (194.6) (275.8) (137.6) (137.6) (70.0)

(Inc)/Dec in Capital Work In Progress (179.5) 8.6 (94.0) (148.7) (230.7)

Add: Non Operating Income Income 69.5 55.0 185.9 263.8 396.1

(Inc)/Dec in Intangible Assets (249.2) 383.1 313.2 0.0 0.0

Net Cash Flow from/(used in) Investing Activities (553.8) 170.9 267.4 (22.5) 95.4

Cash Flow from Financing Activities

Inc/(Dec) in Total Loans (40.7) (45.6) (3.0) 5.9 (0.5)

Inc/(Dec) in Reserves & Surplus 1,370.1 4,198.2 - - -

Inc/(Dec) in Equity 29.9 105.3 - - -

Less: Interest Paid (13.7) (11.5) (7.5) (7.5) (7.5)

Net Cash Flow from Financing Activities 1,345.8 4,245.3 (10.5) (1.6) (7.9)

Net Inc/Dec in cash equivalents 558.4 4,580.0 618.9 297.3 551.3

Opening Balance 43.3 601.7 5,181.7 5,800.5 6,097.8

Closing Balance Cash and Cash Equivalents 601.7 5,181.7 5,800.5 6,097.8 6,649.2 Source: Company, KRChoksey research

Key Ratios (Consolidated)

Key Ratios (Consolidated)


Key Operating Ratios EBITDA Margin (%) -0.8% 6.5% 6.4% 7.3% 7.2% Net Profit Margin (%) -3.4% 2.8% 4.8% 6.1% 6.4% RoE (%) -6.6% 2.1% 3.3% 5.8% 8.3% RoCE (%) -5.4% 2.4% 3.4% 5.8% 8.3%

Current Ratio (x) 2.5x 7.3x 6.0x 4.7x 3.8x Book Value Per Share (Rs.) 50.0 122.9 127.0 134.6 146.2 Financial Leverage Ratios Debt/ Equity (x) 0.0x 0.0x 0.0x 0.0x 0.0x Interest Coverage (x) -1.7x 19.0x 39.6x 64.7x 92.6x

Growth Indicators % Sales Growth (%) 39.0% 16.9% 37.1% 42.8% 46.5% EBITDA Growth (%) N.A. N.A. 35.7% 63.5% 43.1%

Net Profit Growth (%) N.A. N.A. 137.9% 81.7% 54.1%

Diluted EPS Growth (%) N.A. N.A. 137.9% 332.4% 180.1%

Turnover Ratios

Debtors (Days of net sales) 32 42 40 35 33

Creditors (Days of Raw Materials) 87 127 134 124 122 Source: Company, KRChoksey research



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Infibeam Incorporation Ltd. INR 947is trading at EV/Sales (x) of 8x, 5.5x and 3.7x to its FY17E, FY18E and FY19E revenues. Notably, the services segment contributes ~31% to top-line,

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