Buy Tech Mahindra, target of Rs 309: Indiabulls Securities
Indiabulls Securities Research has maintained its buy rating on Tech Mahindra with a target price of Rs 309 in its February 19, 2009 research report. “Tech Mahindra (TM) reported a disappointing performance for the quarter ended December 2008 as revenues went down 2.8% qoq to Rs 11.3 billion, owing to a 3% decline in the sales volume. In USD terms, revenues declined substantially by 14% qoq due to a sharp depreciation in the GBP vis-à-vis the USD. The EBITDA margin improved slightly by 10 bps qoq to 28.1% after adjusting for a one-time tax reversal of Rs 673 million in the last quarter.”
“Although we have cut our target price to Rs 309 because of the deteriorating demand outlook and high revenue concentration, we maintain a Buy rating on the stock. This is attributed largely to TM’s large order book and strong balance sheet. Besides, we believe that the current price correction to the stock is overdone. TM remains a strong value pick in the ITES sector, and we maintain our Buy rating on the stock,” says Indiabulls Securities’ research report.
source: Moneycontrol
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