ANI Integrated Services

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Hi , This is my first post so please excuse my brevity.

About the company -

Incorporated in 2008, ANI Integrated Services Limited is engaged in the business of manpower deputation to the organized sector for providing engineering services such as Erection and Installation of Electrical / Instrumentation / Mechanical Turnkey Projects, Operations and Maintenance, Commissioning Assistance and Shutdown services. Company provided a wide range of engineering services on various international projects, particularly in the UAE, Thailand and Kingdom of Saudi Arabia.

The clients of the company include Larsen & Turbo Industries, Tata Consultancy Engineers Limited, Reliance Industries Limited, Nestle India Limited, Engineering India Limited, Mondelez India Foods Limited, GAIL (India) Limited, etc. ANI has a team of more than 1200+ professionals.

Service Verticals of ANI

  1. Technical Manpower Deputation and Placement
  2. Value Added Customized Services
  3. Project Installation and Erection
  4. Operations and maintenance Contracts

Backed by a team of more than 1200+ adept and skilled professionals, along with large team of Technicians it became one point solution for Design / Detailed Engineering, System Engineering / Programming Engineers, FAT / SAT Engineers, Field Engineers, Installation / Testing Engineers, Commissioning Engineers, Operation & Maintenance Engineers etc.

Business Outlook -

As far as i could think of demand for manpower should go up in next 3 to 4 years as the corporate CAPEX cycle picks up.
ANI seems to be very niche when it comes to power plant erection, The government push towards 24x7 electricity throughout India should be seen as positive tail wind for the company.

Financials -

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What attracted me about this company is they are able to operate with much higher Margins compared to other two listed players.

Quess Corp Ltd OPM - 5.3%
Team lease OPM - 1.3%
ANI Integrated OPM - 19%
Source -
https://www.screener.in/company/AISL/

and hence really eye popping ROE 77.03% and ROCE 93.12%

Surprisingly its trading much cheaper compared to the peers.

Quess Corp Ltd PE - 56
Team lease PE - 50
Security & Intel PE - 83
ANI Integrated PE - 20

Judging by the multiples of peer i feel markets are bullish about the sector and compared to Quess Crop & Team Lease this seems to be a good bet.

Very low Debt on balance sheet.
Debt to equity: 0.21

Risks -
Unproven track record - Just came with IPO, so not much history.
Listed in SME - liquidity is a issue.

Disc: I am not invested.
Would like to know views of experts here first.

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I guess you have pasted screenshots of some other stock, as what you have pasted here is nothing what I see on screener.

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Thanks, I have updated it.

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Anyone know why before the IPO in FY17 there is a sharp increase in Margins ?

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Go through their RHP and interviews of promoters before the listing. As per them, they got more contracts from their MNC customers last year which has better margin than their domestic customers.

They are looking to expand in middle east in near future and hope to get better business from there.

Regards,
Suhag

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Yes i read that too but still margins went up by 271% … i find hard to digest this reason.

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Do you have any idea on the new business they may get in near future? They are mumbai based and L&T is one of their customers. There is lot of infra activity happening around mumbai recently with Trans harbour link, metro phase 3 etc. Do they stand chance to get a pie of work from there as far as resourcing is concerned?

Regards,
Suhag

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It should get benefited due to pick up in infra activities however i won’t feel comfortable until i know these are sustainable margins, Huge jump in Margins just before IPO is a matter of concern for me. Was it done to price company little higher for the Investors ?

If you think practically you start small catering to small clients and gradually move towards MNC clients, You should see gradual improvement in margins , It should not be a step function (that too of +270%), in one fine year you upgraded all to MNCs doesn’t work this way.
Secondly if you see all their list peers
Quesscorp , Team lease etc work on very thin margins 5-6% , they cater to MNCs too.

In this kind of men deputation business getting 19% margins is tough, I mean after all you are just a skill provider. Only way this is possible if they are underpaying really bad to their employee.

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Technical breakout in ANI daily pattern …

Bullish triangular breakout pattern.

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Do we really need to look at such breakouts for SMEs where stocks are traded in lots with very less liquidity? For ANI, except today the volumes have been very low from last 2-3 weeks and script is range bound between 160-180.

Regards,
Suhag

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@AmitContrarian do you know if ANI published half yearly results? Thanks

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Next half yearly results only after March-18.

Regards,
Suhag

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What about April-Sept’17 results?

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I think they declared till June-17 as part of RHP. You can check that for more details.

Regards,
Suhag

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Yes, saw that in RHP but couldn’t locate results for H1

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I feel earnings are inflated the trade receivables are 30% of sales, Not lots of FCF if you compared with PAT.

Considering all that its trading at fair or at little higher valuations.

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Corrected almost 50% from high, technically looks good for long

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Any news or anything ? How to find disclosures in NSE website.