Target: ₹330
CMP: ₹257.05
We initiate coverage on iValue Infosolutions with a Buy and a TP of ₹330. Ivalue is India’s only listed VAD (value added distributor) specialising in creating solutions across cybersecurity, ILM, ALM, Cloud and Data centres. Strong partnerships with leading OEMs like Hitachi Vantara, Checkpoint, Forcepoint, etc., along with System Integrators (SIs) like Infosys, TCS and Deloitte, among others, demonstrate its robust business model.
Ivalue has maximised on the cloud opportunity by working with System Integrators on large deals like Aadhar and GST. As a VAD, Ivalue provides solutions across BFSI, IT, Telecom & Government.
Presence across high-growth segments, a large addressable market, strong conversion ratio (25 per cent+), and a credible history provide strong visibility and comfort. Being a low capex, high return ratio and healthy margin business (especially among distributors), we expect Ivalue to report stronger growth.
The financial strength is reflected in a track record of solid topline growth, 2x the margins of vanilla distributors, along with 20 per cent + return ratios. We see Ivalue delivering 19 per cent + EPS CAGR over FY25-28.
Key risks: Vendor concentration risk, margin compression risk (large deals) and working capital/credit risk.