INDES: 1Q23 Review (Oyak Yatırım)

Margins deteriorated but net cash grew

Indeks Bilgisayar posted a net profit of TL130mn (63% y/y, 3% q/q) in 1Q23, below market consensus (TL163mn) but same as our estimate (TL130mn). We believe that lower-than-expected EBITDA and higher-than-expected financial costs caused the deviation with market consensus estimates. EBITDA came in at TL308mn, increased by 76% y/y, but decreased 51% q/q. EBITDA was also below market consensus (TL331mn), but in-line with our estimate (TL325mn). Revenues were TL8.4bn in 1Q23, up by 63% y/y and 13% q/q, and were in-line with market consensus (TL8.3bn) and our estimate (TL8.4nn). Net cash increased by 21% q/q to TL1,9bn, thanks to lower net working capital requirement. Accordingly, net debt/EBITDA decreased to -1.6X (2022: -1.5X).

Top-line grew y/y and q/q
Thanks to strong demand, the information and communication sector stayed lively in 1Q23. Thus, INDES revenues grew by 63% y/y despite relatively stable FX rates, reaching TL8.41bn. Due to seasonality, revenues only grew by 3% q/q.

Margins are hurt by seasonality in product mix
Gross margin reached 4.9% (4Q22: 6.4%, 1Q22: 4.3%) in 1Q23. Opex-to-sales increased slightly to 1.3% (4Q22: 1.1%, 1Q22: 1.0%). EBITDA came in TL308mn, below market consensus estimate of TL331, which corresponds to a 3.7% EBITDA margin (4Q22: 5.4%, 1Q22: 3.4%). Net margin was 1.6% (4Q22: 1.8%, 1Q22: 2.0%), which decreased slightly due to high financial expenses along with lower operational profitability. We believe that the main reason for the margin deterioration was the change in sales mix, related to the seasonality as value-added products are usually purchased at year-end with new project developments.

Net cash grew by 21% q/q
The company’s net cash position increased by 21% q/q to TL1.93bn, thanks to strong net working capital management on the receivable front. Accordingly, net debt / EBITDA multiple was reduced to -1.6x vs -1.5x a quarter ago.

Outperform rating, TP and 23E estimates maintained
We keep our 23E estimates unchanged for INDES as TL32.9bn revenue, TL1.3bn EBITDA, and TL673mn net income. Our target price of TL30.98/share offers 95% upside potential from current market levels. We maintain our Outperform rating. The stock trades at 1.7x EV/EBITDA and 5.3x P/E multiples on our 2023 forecasts.


Oyak Yatırım Menkul Değerler A.Ş.
                                   ***
                               Yasal Uyarı
 
 Burada yer alan yatırım bilgi, yorum ve tavsiyeler yatırım danışmanlığı kapsamında değildir.Yatırım danışmanlığı hizmeti ; aracı kurumlar, portföy yönetim şirketleri, mevduat kabul etmeyen bankalar ile müşteri arasında imzalanacak yatırım danışmanlığı sözleşmesi çerçevesinde sunulmaktadır.Burada yer alan yorum ve tavsiyeler, yorum ve tavsiyede bulunanların kişisel görüşlerine dayanmaktadır.Bu görüşler mali durumunuz ile risk ve getiri tercihlerinize uygun olmayabılır.Bu nedenle, sadece burada yer alan bilgilere dayanılarak yatırım kararı verilmesi beklentilerinize uygun sonuçlar doğurmayabilir.