KIM ENG recommends 'Buy' on Tech Mahindra
KIM ENG Securities has initiated coverage on Tech Mahindra with a ‘Buy’ recommendation. It has set a target price of Rs 1213 on the stock.
By ET Bureau |
MUMBAI: KIM ENG Securities has initiated coverage on Tech Mahindra with a ���Buy��� recommendation. It has set a target price of Rs 1213 on the stock.
���Tech Mahindra (TECHM) should perform well on an expected Rs 9 billion earnings contribution from 43%-owned Satyam Computer Services (now called Mahindra Satyam).
TECHM has managed Mahindra Satyam for 6 months and has improved its reputation after last year���s scandal and reduced financial risk. TECHM will also benefit from improving business for major client, British Telecom, which accounts for 50% of TECHM���s FY10F revenue and 60% of FY11F revenue.
Other positives for TECHM include declining SG&A, lower interest cost and an improving balance sheet (company is quickly paying down Rs21bn in debt associated with investment in Satyam). Our share TP for TECHM is Rs 1,213 with core business valued at Rs 892 (based on a PER of 15x FY11F) and the stake in Mahindra Satyam valued at Rs 321,��� the recommendation said.
���Tech Mahindra (TECHM) should perform well on an expected Rs 9 billion earnings contribution from 43%-owned Satyam Computer Services (now called Mahindra Satyam).
TECHM has managed Mahindra Satyam for 6 months and has improved its reputation after last year���s scandal and reduced financial risk. TECHM will also benefit from improving business for major client, British Telecom, which accounts for 50% of TECHM���s FY10F revenue and 60% of FY11F revenue.
Other positives for TECHM include declining SG&A, lower interest cost and an improving balance sheet (company is quickly paying down Rs21bn in debt associated with investment in Satyam). Our share TP for TECHM is Rs 1,213 with core business valued at Rs 892 (based on a PER of 15x FY11F) and the stake in Mahindra Satyam valued at Rs 321,��� the recommendation said.
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