Axis Securities maintains 'hold' on MphasiS

Axis Securities has maintained its ‘Hold’ rating on MphasiS with a target price of Rs 395. MphasiS reported Q1 revenue of $232 million, which was in line with the estimate of $235 million. However, a higher rupee and lower SG&A led to EBITDA/PAT being higher than the estimate by ~2%/4%, respectively. “We expect revenue to improve in coming quarters on better run-rate in non-HP (48%), incorporation of Digital Risk (DR) acquisition, and declining weakness in HP business. Increased surcharge in FY14 budget leads to no material change to our FY13E/FY14E earnings. The target price stands at Rs 395 (8x FY14E core EPS of Rs 37 and cash of Rs 95 per share.