ArMee Infotech IPO

ArMee Infotech Limited IPO Strengths

• Proven Expertise in Government and PSU Projects

ArMee Infotech Limited excels in executing IT infrastructure projects for Government and PSU clients, securing contracts through competitive bidding. Contributing to initiatives like E-Gram Vishwagram and Samagra Shiksha Abhiyan, the company ensures cost-effective, timely execution, generating substantial revenue while enhancing government digitisation efforts across multiple states.

• Strong Financial Performance and Growth

ArMee Infotech Limited has demonstrated consistent revenue and profitability growth, maintaining a strong balance sheet. With a significant CAGR in revenue and net profit, the company ensures financial stability. Its positive cash flows support expansion opportunities while enabling efficient management of operational needs and unanticipated financial variations.

• Versatile Service Capabilities Across Multiple Sectors

ArMee Infotech Limited delivers IT infrastructure and managed services across diverse sectors, including education, healthcare, and rural development. Its sector-agnostic approach enhances adaptability, mitigating industry-specific risks. Expanding into renewable energy and Experience Zones, the company seamlessly integrates technology solutions while effectively executing government and private sector projects.

• Experienced Leadership Driving Growth

Led by seasoned promoters and a skilled management team, ArMee Infotech Limited benefits from extensive industry expertise. Its leadership ensures strategic expansion, strong client relationships, and operational efficiency. Supported by qualified professionals, the company remains well-positioned to capitalise on growth opportunities and sustain its competitive advantage.

More About ArMee Infotech Limited

ArMee Infotech Limited is an IT infrastructure and managed services company headquartered in Ahmedabad, Gujarat. Expanding beyond core IT services, the company has ventured into retail sales through Experience Zones, offering IT products, consumer electronics, gaming merchandise, and renewable energy via solar EPC and PPAs.

Client Base and Revenue

The company serves both government/public sector undertakings (PSUs) and private sector clients across various industries, with a majority of revenue generated from government/PSU projects.

IT Infrastructure Services

Under IT infrastructure, ArMee Infotech Limited provides:

• IT hardware and software, including computers, servers, and interactive panels

• Installation and integration based on client requirements

• Maintenance of installed infrastructure under contract

• Functional training for seamless client transition

Key projects include:

• ICT lab setup and smart classrooms

• Digital Infrastructure for the Public Distribution System under NFSA 2013

• IT hardware supply and installation for government entities

IT Managed Services

Expanding beyond infrastructure, IT-managed services include:

• Technical manpower and skill development training

• Annual maintenance services

• On-site and off-site operational support

These services are provided under service level agreements (SLAs) with payments at predefined intervals.

Renewable Energy Expansion

ArMee Infotech Limited has entered the renewable energy sector, leveraging India’s rapid solar growth. The company has secured its first turnkey solar EPC contract for a 50 MW photovoltaic plant in Maharashtra.

Retail Expansion – Experience Zones

The company launched its first Experience Zone in Ahmedabad (November 2024) under an Acer Re-Seller Agreement. Plans are underway to establish up to 60 exclusive Experience Zones, including a second outlet in Bengaluru.

Growth Factors for Experience Zones:

• Evolving consumer preferences for engaging shopping experiences

• Higher disposable income, increasing demand for premium products

• Digital integration, bridging online and offline retail

Project Portfolio and Workforce

As of September 30, 2024, the company manages:

• 20 ongoing projects (11 IT infrastructure, 9 IT managed services)

• 183 completed projects with active warranty periods

• 1,772 skilled employees, with 693 additional contractual staff

With a proven track record in IT services, a strategic retail expansion, and a strong entry into renewable energy, ArMee Infotech Limited is poised for sustained growth and diversification.

Industry Outlook

Market Overview

The Indian IT services market is experiencing robust growth, driven by increasing demand for digital transformation, cloud computing, artificial intelligence (AI), and cybersecurity solutions. In 2024, the market was valued at USD 25.59 billion and is projected to reach USD 51.05 billion by 2030, reflecting a CAGR of 12.03% during this period.

Growth Drivers

• Digital Transformation Initiatives: Organisations across sectors are investing in digital technologies to enhance efficiency and customer engagement.

• Cloud Adoption: The shift towards cloud computing is fueling demand for IT infrastructure and managed services.

• Cybersecurity Concerns: With increasing cyber threats, companies are prioritising managed security services for data protection.

Key Figures

• Managed Services Market Revenue (2023): USD 14,906.6 million, expected to reach USD 41,260.5 million by 2030.

• CAGR (2024-2030):15.7%

• Top Segments:

• Managed Data Center Services: Leading revenue generator

• Managed Security Services: Fastest-growing segment

Renewable Energy Sector: Solar EPC in India

Market Overview

India’s solar energy market is rapidly expanding, supported by government policies and private sector investments. The market is expected to grow from USD 9.87 billion in FY2024 to USD 33.09 billion by FY2032, registering a CAGR of 16.33%.

Growth Drivers

• Government Initiatives: Programs like the National Solar Mission are boosting solar capacity.

• Cost Competitiveness: Declining solar panel prices make solar power more accessible.

• Environmental Concerns: The drive to reduce carbon emissions is accelerating renewable energy adoption.

Key Figures

• Solar Power Market Size (Global): USD 253.69 billion in 2023, projected to reach USD 436.36 billion by 2032.

• Solar EPC Market Value: USD 249.16 billion in 2024, expected to hit USD 459.8 billion by 2035 at a CAGR of 7%.

How Will ArMee Infotech Limited Benefit

• ArMee Infotech Limited is set to benefit from the booming IT services market, leveraging increased demand for digital transformation, cloud computing, and cybersecurity solutions.

• The company’s strong government and PSU client base ensures consistent revenue streams and long-term contracts.

• Its IT-managed services segment is poised for high growth, with businesses increasingly outsourcing technical manpower, maintenance, and operational support.

• Expansion into retail through Experience Zones allows diversification, tapping into India’s rising demand for premium consumer electronics and gaming merchandise.

• The company’s entry into the solar EPC sector positions it to capitalise on India’s renewable energy push, securing government-backed projects and private-sector investments.

• The 50 MW solar EPC project in Maharashtra strengthens its credibility in the renewable energy market.

• A growing workforce and project portfolio enhance operational efficiency and service delivery, ensuring sustained business growth and diversification across sectors

Peer Group Comparison

Name of the Company	Face Value (₹)	Total Revenue (₹ in million)	EPS (₹) (Basic)	NAV (₹ per share)	P/E Ratio	RoNW (%)	PAT Margin (%)
ArMee Infotech Limited	10.00	10205.74	21.12	40.11	[●]	52.67%	4.91%
Peer Groups
Dynacons Systems & Solutions Limited	10.00	10244.63	42.41	124.22	29.35	34.13%	5.25%
Orient Technologies Limited	10.00	6028.92	11.80	49.93	37.44	23.64%	6.87%

Key insights

• Face Value:All three companies, including ArMee Infotech Limited, have a face value of ₹10 per equity share, ensuring a standard base for valuation. This uniformity makes it easier to compare stock performance across the peer group.

• Total Revenue: ArMee Infotech Limited reported ₹10,205.74 million in revenue, slightly lower than Dynacons Systems & Solutions Limited (₹10,244.63 million) but significantly higher than Orient Technologies Limited (₹6,028.92 million), indicating stronger market positioning.

• Earnings Per Share: ArMee Infotech Limited recorded an EPS of ₹21.12, considerably lower than Dynacons (₹42.41) but higher than Orient Technologies (₹11.80). A higher EPS generally signals greater profitability per share, favouring investors.

• Net Asset Value: With a NAV of ₹40.11, ArMee Infotech Limited ranks lowest among the three. Dynacons (₹124.22) leads, indicating stronger asset backing, while Orient Technologies (₹49.93) holds a mid-range position.

• Price-to-Earnings (P/E): The P/E ratio for ArMee Infotech Limited is undisclosed. Dynacons (29.35) and Orient Technologies (37.44) show that investors are willing to pay higher multiples for these stocks, expecting future earnings growth.

• Return on Net Worth: With a RoNW of 52.67%, ArMee Infotech Limited outperforms Dynacons (34.13%) and Orient Technologies (23.64%), suggesting superior capital efficiency and higher profitability in relation to shareholder equity.

• Profit After Tax: ArMee Infotech Limited’s PAT margin of 4.91% is lower than Orient Technologies (6.87%) and Dynacons (5.25%), indicating lower net profitability despite strong revenues, possibly due to higher costs or investment expenses.

Key Strategies for ArMee Infotech Limited

• Diversifying Product and Service Offerings

ArMee Infotech Limited continuously expands its product and service portfolio by integrating IT Infrastructure and IT Managed Services. The company leverages technological advancements in experience zones, payment devices, and data migration while capitalising on the growing demand for renewable energy through solar EPC projects and power purchase agreements (PPAs).

• Expanding Experience Zones for Consumer Engagement

The company enhances brand-consumer interactions through experience zones—interactive spaces that engage all five senses. These zones differentiate brands, highlight product features, and create lasting impressions. With rising urbanisation and a tech-savvy population, ArMee Infotech plans to expand beyond its Ahmedabad Experience Zone, with discussions underway for a Bengaluru location.

• Strengthening Presence in Digital Payments

With India witnessing rapid growth in digital payments due to government initiatives, ArMee Infotech has undertaken projects integrating PoS devices and automating fair price shops. The company plans to expand in this sector, recognising its role in financial inclusion and economic transformation.

• Growing Data Migration Capabilities

The shift from physical storage to cloud-based solutions has increased demand for data migration services. ArMee Infotech provides these services alongside IT infrastructure and managed solutions. As businesses embrace digital transformation, the company intends to scale its data migration projects to meet market needs.

• Advancing into Renewable Energy Solutions

India’s solar power capacity is growing at a rapid pace, driven by sustainability goals. ArMee Infotech aims to establish itself as an EPC service provider in the solar sector and enter PPAs, offering cost-effective energy solutions. The company has already bid for projects in Uttar Pradesh and Maharashtra.

• Enhancing STEM and Atal Tinkering Labs

With the increasing importance of technology in education, ArMee Infotech has experience in setting up STEM and Atal Tinkering Labs. These labs foster hands-on learning in robotics, electronics, and 3D printing, and the company plans to explore further opportunities in this sector.

• Expanding Geographic Footprint

Currently operating in Gujarat with branch offices in Haryana, Karnataka, and Maharashtra, ArMee Infotech plans nationwide expansion. With India’s growing demand for IT infrastructure and managed services, the company actively bids for projects across various states to increase its presence and market reach.

• Balancing Government and Private Sector Clients

A significant portion of ArMee Infotech’s revenue comes from government and PSU projects under various models, including O&M, BOO, and BOOT. While continuing its focus on public sector contracts, the company seeks to expand its private client base to ensure a balanced revenue mix.