What is ICSA

ICSA (India) Limited operates in two segments: software services and embedded solutions, and products and projects related to power sector. It serves the energy sector, which includes electrical power, oil, natural gas and water. Its product portfolio for the power segment include intelligent automatic meter reading (IAMR), distribution transformer monitoring system (DTMS), theft detection device (TDD), sub-station controller and energy auditing services, SMART meters, Power Quality Management Systems etc.

Highlights:

• ICSA (India) Ltd is bullish on demand potential of the SMART meters facility with peak revenue potential of Rs.1000–1500mn in the next 3-4 years.
• ICSA is also bullish on Power Quality Management Systems (PQMS), designed to monitor interruptions, durations, voltages etc., at each distribution transformer level.
• Near-term triggers to the stock include possible order inflow from high margin ESS business from Q3 FY11 onwards, fruition of which could provide an upside to the current order book of Rs.18bn.

Latest Developments at ICSA (India) Ltd

• Strengthening SMART meter capacity: ICSA has set-up SMART meters manufacturing facility in Andhra Pradesh with a total capacity of 150,000 meters/month at a cost of Rs.260mn. SMART meter is a combination of energy meter and a communication device, which would form a part of smartgrids network in the country. ICSA sees immense demand potential for these meters going forward.
• Product pipeline getting stronger with Power Quality Management System (PQMS): ICSA has recently completed a pilot project for installation of a power quality management system (PQMS). PQMS has been designed specifically to monitor interruptions, durations, voltages etc., at each distribution transformer level. This equipment would help to improve power quality. The company expects immense potential for this new product going forward.
• Expects orders inflow for high margin ESS business by Q3FY11 onwards under RAPDRP: The company is maintaining the same guidance in terms of orders inflow for its high margin ESS business from System Integrators by Q3FY11 onwards under RAPDRP. For SCADA solutions, the company is expecting floatation of tenders after one and a half month. Currently, the company has placed bids for projects worth ~Rs.2bn for ESS business (other than SCADA solutions) and ~Rs.8bn for overall ESS and SCADA solutions. These above said orders are not part of the opportunities available under RAPDRP.
• Looking for other opportunities available in Oil & Gas and Water segment: ICSA is considering a business opportunity of Rs 16–17bn for its product Intelligent Cathodic Protection System (iCap) from the oil and gas segment in the next 2–3 years. Apart from this, the company is looking for a business opportunity of Rs.21–22bn for its products Intelligent Automatic Water Meter Reading and Agricultural Load Management System from water and irrigation segment in the next 2–3 years.