Stock views on Allied Digital, Mphasis

ICICI Securities on ALLIED DIGITAL SERVICES

We expect ADSL to report 16% QoQ revenue growth to Rs1.73bn, including Rs480mn (US$10mn) revenues from the recently acquired EnPointe Global Services (EGS). With margin improvement in EGS and higher proportion of services revenues, we expect EBITDA margin to expand by 120bps QoQ to 20.0%. EBITDA should also increase by 22.9% QoQ to Rs345mn. With lower forex gain, we expect profit after tax to grow 12.7% QoQ to Rs271mn.


Emkay Global Financial Services on MPHASIS


Mphasis remains the best demand story in the sector driven majority by shift of work offshore through the EDS. The proportion of revenues from related parties over the past 4 quarters has increased from 46% to 58%. It reported revenues of Rs 3282 mn, with operating margins at 26.5%, up by ~530 bps from September’08 quarter.