| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 34.40 | -21 |
| Intrinsic value (DCF) | 22.35 | -49 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 9.70 | -78 |
Infotel SA is a leading French software and IT services company specializing in security, performance, and data management solutions. Founded in 1979 and headquartered in Paris, Infotel provides a suite of proprietary software products, including Arcsys for electronic data archiving, iDBA-Online for DB2 database management, and Infoscope for application testing. The company serves diverse sectors such as banking, finance, insurance, industry, and public administration, offering consultancy, system audits, and third-party application maintenance. With a strong presence in Europe and globally, Infotel combines deep technical expertise with industry-specific solutions, positioning itself as a trusted partner for enterprises requiring high-performance IT infrastructure and compliance-ready software. The company’s focus on innovation and long-term client relationships has solidified its reputation in the competitive software services market.
Infotel SA presents a stable investment opportunity with moderate growth potential in the IT services sector. The company’s solid financials—€294.8M in revenue and €18.5M net income (FY 2024)—reflect steady performance, supported by strong operating cash flow (€36.6M) and a healthy cash position (€109.9M). Its low beta (0.584) suggests lower volatility compared to the broader market, appealing to risk-averse investors. However, the company operates in a highly competitive industry with thin margins, and its reliance on European markets may limit diversification. The dividend yield (~2.8% based on a €2/share payout) adds income appeal, but investors should monitor debt levels (€31.1M) and sector-specific risks like IT spending cyclicality.
Infotel SA competes in the niche IT services and software market, differentiating itself through specialized solutions like Arcsys and iDBA-Online. Its competitive advantage lies in deep vertical expertise (e.g., banking, insurance) and a hybrid model combining proprietary software with consulting services. However, it faces pressure from larger global IT service providers (e.g., Capgemini, Atos) with broader portfolios and greater scalability. Infotel’s smaller size allows agility and customization but limits its ability to compete on large-scale outsourcing deals. The company’s focus on DB2 database management and archival software provides defensible niches, but emerging cloud-native competitors threaten its traditional on-premise solutions. Its strong cash reserves and debt-light balance sheet provide flexibility for R&D or acquisitions to bolster its offerings. Regional concentration in Europe is both a strength (local client relationships) and a weakness (limited global reach).