OREANDA-NEWS. June 23, 2010. IBS Group announced preliminary results for fiscal year 2009 (ended 31 March 2010). Revenue was USD504.5m, down 23% YoY. Adjusted EBITDA was up 40% YoY, reaching USD 36.7m, while the EBITDA margin was 7.3%, compared with 4% last year, reported the press-centre of OTKRITIE Financial Corporation.

View: The IT industry suffered during the crisis, so a significant revenue decline was expected, although the software unit outperformed, with a 25% YoY revenue increase. The improvement in margin is a result of effective cost-cutting, as well as an increased share of revenue coming from IBS's higher-margin software business. Overall, we view these as strong results. 

Valuation: IBS Group trades on a 2010 EV/EBITDA of 6.6x.

Action: We reiterate our BUY rating and target price of USD 33/share on IBS, with an upside of 138%. The traded volume is currently low, but we expect an increase in liquidity when IBS upgrades its listing on the Frankfurt Stock Exchange later this year.