Nortel bankruptcy seen impacting Sasken's revenue
Telecommunications equipment maker, Nortel's bankruptcy filing is posing significant risks to future revenues of Bangalore-based Sasken Communication, Merrill Lynch said.
By ET Bureau |
MUMBAI: Telecommunications equipment maker, Nortel's bankruptcy filing is posing significant risks to future revenues of Bangalore-based Sasken Communication, Merrill Lynch said.
The investment bank said, as per its "back-of-the-envelope" calculation, the bankruptcy risks an earnings downside of 20% to 30% to the 2009-10 and 2010-11 estimates from Nortel.
Nortel is believed to be contributing roughly 10% to Sasken's earnings.
���Our estimate of downside risk of 20%-30% to FY10 and FY11 estimates factors in loss of at least part revenue from Nortel. Additionally, there could be a one-time writeoff of bad debts,��� Merrill said in a report, while downgrading its price target on Sasken to Rs 50 from Rs 120.
���Chap 11 filing by Nortel, one of the leading OEM players, suggests recovery could take much longer than anticipated, indicating further downside risk to estimates," it added.
An e-mail questionnaire to Sasken's CFO Neeta Revankar on this matter went unanswered. At 1:40 pm, Sasken shares were at Rs44.05, down Rs1.6 or 3.5% from Wednesday.
The investment bank said, as per its "back-of-the-envelope" calculation, the bankruptcy risks an earnings downside of 20% to 30% to the 2009-10 and 2010-11 estimates from Nortel.
Nortel is believed to be contributing roughly 10% to Sasken's earnings.
���Our estimate of downside risk of 20%-30% to FY10 and FY11 estimates factors in loss of at least part revenue from Nortel. Additionally, there could be a one-time writeoff of bad debts,��� Merrill said in a report, while downgrading its price target on Sasken to Rs 50 from Rs 120.
���Chap 11 filing by Nortel, one of the leading OEM players, suggests recovery could take much longer than anticipated, indicating further downside risk to estimates," it added.
An e-mail questionnaire to Sasken's CFO Neeta Revankar on this matter went unanswered. At 1:40 pm, Sasken shares were at Rs44.05, down Rs1.6 or 3.5% from Wednesday.
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