Brocking House views on Midcap IT - Sonata Software, Mastek

Parag Parikh views on Sonata Software - Target of Rs 44

Parag Parikh Financial Advisory Services has maintained its buy rating on Sonata Software with a target of Rs 44 in its October 15, 2008 research report. "Sonata Software has reported extremely good results for the 2nd quarter of FY09. Overall, the results have increased our confidence on the company. Factoring the robust Q2 results and the changed currency scenario, we are increasing our earnings estimate for FY09 from Rs 6.25 to Rs 7.25 per share. We maintain our BUY call on the scrip, with a target of Rs 44 based on 6x FY09E (117% Upside)," says Parag Parikh Financial Advisory Services' research report.

PINC Research Views on Mastek - Target of Rs 287

PINC Research has recommended a buy rating on Mastek with a revised 12 month price target of Rs 287 in its October 14, 2008 research report. "Mastek Ltd. (Mastek) reported a soft quarter as net sales in USD terms slid 4.5% QoQ to USD 57.9 million due to a 7% depreciation of the GBP against the USD. The quarter enabled a net profit increase of 6.8% to Rs 412 million."

"At the CMP of Rs 225, Mastek is trading at a P/E of 3.9x and EV/EBIDT of 2.3x its FY09E. While a weak INR should help it post robust growth in FY09, the growth rates would be under pressure and thus FY10 earnings growth could be capped, though it is too early so say that conclusively. While we have downgraded our growth outlook, we still expect Mastek to post a double digit earnings CAGR (FY08-10), which in the back drop of the recent correction in stock price leaves room for a marked upside, despite a sectoral de-rating and earning uncertainty. Hence, we maintain our ‘BUY’ recommendation with a revised 12 month price target of Rs 287. (prev. Rs 514)," says PINC's research report.