Buy Hinduja Global Solutions, target Rs 1230: Anand Rathi

Anand Rathi has a buy call on Hinduja Global Solutions Ltd. with a target price of Rs 1230.0 . The current market price of Hinduja Global Solutions Ltd. is Rs 892.0 Time period given by analyst is year when Hinduja Global Solutions Ltd. price can reach defined target.
Hinduja Global Solutions Ltd., incorporated in 1995, is a midcap company with a market cap of Rs 1801.69 crore.

Investment rationale by Anand Rathi
Hinduja Global Solution’s Q4 $156m revenue was up 3.1% q/q, 10.5% y/y (CC growth: 7.9% y/y). The growth was broad-based, with healthcare (up 2.9% q/q) contributing 51% to revenue. The EBITDA margin, at 10.2%, was lower than anticipated, partially on one-time costs (84bps) related to M&A and partially to gross-margin erosion. We are positive about the company on its balance sheet turning net neutral and capex coming down sharply (30% y/y). Factoring in the rupee depreciation, we raise FY19e/20eearnings ~9% and raise our TP to `1,230 (9.5x FY20 EPS, a 30% discount to FSOL).