ICSA (India) Ltd - 1065.00 Rs

Incorporated in 1994, ICSA India Ltd. (ICSA), formerly known as Innareddy Computer Software Associates (India) Ltd. is a Hyderabad based company constructing power transmission lines and substations. It has also developed products suitable for power utilities in the field of energy management, energy audit, control applications and provides versatile data acquisition systems using communications media such as GSM, CDMA and RF. Presently, its business is in three segments namely embedded solutions, electrical construction services and software solutions. In the revenue mix, more than 55% comes from infrastructure projects and the balance 45% comes from embedded solutions & products.

In embedded technology solutions, it has successfully deployed products like substation controllers, distribution transformer controllers, theft detection devices, spot billing machines and Intelligent Automatic Meter Reading systems etc. Its Remote Monitoring applications, apart from the power sector, are utilized in a number of other sectors, which include oil, gas, mining, irrigation, transport and water utilities, etc. ICSA has also developed technology solutions to identify transmission and distribution (T&D) losses and monitor power consumption using GSM Network. The Remote Switching facility designed by the company fits well with the ongoing power sector reforms. Its remote sensing applications can transfer data from power points to the control room through telephone lines and wireless including GSM technology.

Secondly, ICSA is one of the leading Indian companies offering Total/Partial turnkey services for electrical infrastructure projects in power generation, transmission and distribution sectors. It is capable in design, supply, transport, erection, testing & commissioning of 400 KV, 220KV, 132 KV Transmission Lines & Sub Stations on EPC basis. It has already entered into HVDS distribution works, Rural Electrification works and Industrial Electrification works in most of the States in India thereby emerging as a truly national level power sector company. Besides, the company has forayed into foreign countries also and is also executing a big project in Sudan.

Thirdly, ICSA provides customized solutions like software application and customer specific solutions for metering, billing and collection on per customer payment basis or variations of the BOOT model. The company supplies its products to many State Electricity Boards (SEBs) and private companies such AP Transco, APEPDCL, APCPDCL, APSPDCL, CESCO, SOUTHCO, Elmarc Ltd, Reliance Energy, NEEL, UPRNNL, MSEDCL, etc. Notably, the company has entered into an agreement with OIL India Ltd. to provide products and services in monitoring oil and gas pipelines which will forecast and control the rate of corrosion apart from addressing issues such as pilferage and thefts along the pipeline.

ICSA’s goal is to bring down the cost per unit of power by optimizing critical production processes and minimize transmission, distribution and transaction losses while at the same time save valuable consumer resources by real time audit and meter reading, billing systems, accountability and transparency systems, shortages and disaster prediction applications, SCADA (Supervisory control and Data Acquisition) and management solutions using best practices. Since the last three fiscals, the company is growing at a scorching pace and has ended FY07 on a buoyant note. Both sales and profit have quadrupled to Rs.330 cr. and Rs.64 cr. respectively registering an EPS of Rs.93 on its tiny equity of Rs.6.82 cr. To fund its future growth plans, the company has recently raised approx Rs.200 cr. through FCCB route and has also issued 750,000 warrants at Rs.1135. However for FY08, it is estimated to report a topline of Rs.500 cr. with PAT of Rs.90 cr. This works out to an EPS of Rs.100 on its estimated diluted equity of Rs.9 cr. Investors are advised to accumulate this scrip at sharp declines as share price can easily appreciate 50% in 12-15 months.