Price target of 120 easily achievable for 3i Infotech: Satish Betadpur

Satish Betadpur, CFA, Global Research Director in a chat with ET Now gives his take on 3i Infotech.

3i Infotech even with its debt concerns why are you so bullish on this stock?

3i Infotech, they are in the IT space. The stock currently trading at sub 5 times earnings and we believe that it's exceedingly cheap for a stock that’s going to show at least a 10% to 13% bottom line and top line growth for next year.

We believe that the stock can easily trade up to 120 levels in a normal market. One of the reasons why the stock is trading at such low levels is the concern about their debt. Now we believe that the debt is more long term and therefore doesn’t cause any stress to the balance sheet.

It can be easily repaid since the debt needs to be paid over the next 5 to 6 years. They are also changing their business model going from products into services and a solution so that we believe is again positive for the stock. The main trigger for the stock could be the exit of ICICI which is a promoter and they hold about 23% stake in.

We believe ICICI is looking to exit this stock at some point and therefore there may be an open offer on the stock even otherwise we believe that the price target of 120 is easily achievable over a investment horizon.