Indiabulls Securities views on Patni Computer Systems, Suzlon Energy, Mphasis

Indiabulls Securities on Patni - Target of Rs 123

Indiabulls Securities Research has maintained its buy rating on Patni Computer Systems with a target price of Rs 123 in its research report.

"Patni Computer System (Patni)’s result for CY08 was in line with our estimates. For Q4 CY08, Patni reported 6.7% qoq growth in net sales to Rs 8.5 billion, largely helped by the sharp depreciation of the rupee vis-à-vis the dollar. However, revenues went down by an expected 3.9% qoq, in USD terms, due to the global slowdown. The EBITDA margin declined 874 bps to 10.9%, owing to a weak operational performance during the quarter. Nonetheless, Patni remains an attractive value pick, considering its low EV/EBITDA. Besides, the Company has a high investment portfolio & cash position, which will work as a strong base for its stock price. Although we have reduced our target price (TP) to Rs 123 from Rs 142, we maintain our Buy rating on the stock," says Indiabulls Securities' research report.


Indiabulls Securities on Suzlon Energy - Target of Rs 53

Indiabulls Securities Research has recommended a buy rating on Suzlon Energy with a target price of Rs 53 in its research report.

"Suzlon Energy Ltd. (SEL) reported a strong operating performance during Q3’09. Net sales for the Company (Wind Group and Hansen) increased 56.2% yoy to Rs 49.5 billion, mainly on account of better sales realisations and increased sales volumes. EBITDA increased 64% to Rs 6.4 billion due to a decline in raw material costs and a 21% yoy increase in the average realisation rate."

"Though our near-term outlook for the Company has weakened because of the prevailing slowdown, we believe that the current market price more than factors the negatives. Based on our valuation, we have arrived at a target price of Rs 53 (assuming an 11.2% WACC and a 5% terminal growth rate). Since our target price provides an upside potential of 36% from the CMP, we give a Buy rating," says Indiabulls Securities' research report.


Motilal Oswal on Mphasis - Target of Rs 200

Motilal Oswal has maintained its buy rating on Mphasis with target price of Rs 200 in its research report.

"Mphasis reported QoQ revenue growth of 9.3% at Rs 9.8 billion v/s our estimate of Rs 9.6 billion for the quarter ended January 2009. The company has changed its financial year to Y/E October, in line with HP’s reporting cycle. EBIT margin at 21.5% was up 260bp QoQ. PAT at Rs 2.1 billion grew 15% QoQ with PAT margin expansion of 100bp QoQ to 21.5%. Forex gains were Rs 30.9 million in 1QFY09 v/s Rs 149 million in 4QFY08. Tax rate at 3.2% was lower than 2.8% in 4QFY08."

"Mphasis has displayed impressive execution since the last few quarters with 1] robust operating margin expansion, 2] improvement in billing rates in an environment of high pricing pressure, 3] improvement in utilization. We believe Mphasis would benefit from its strong parentage (HP and EDS) and presence in offshorable service lines like BPO, infra and application maintenance services in the near future. Maintain Buy, target price of Rs 200," says Motilal Oswal's research report.