Buy Satyam Computer Services, tgt of Rs 445: India Infoline

India Infoline has maintained its buy rating on Satyam Computer Services with a one-year target price of Rs 445 in its research report. "Satyam reported a strong 8.5% qoq rupee growth aided by 6.7% rupee depreciation during the quarter. On comparing the actual revenues to the guidance after re-basing at Rs 40 (assumed rate for Q1 guidance), it is clear that company has missed the guidance by 1.2-1.7%. Other income was surprisingly higher 44% qoq due to lower than expected forex loss of Rs 363 million reported by the company. This, along with marginally lower tax provision, led to a net profit jump of 17.3% qoq."

"We believe that at CMP Rs 383 ie near 10x FY10 P/E, all the company-specific negatives and near term macro uncertainties are more than factored in. Given the management’s confidence and modest required growth rates, we expect Satyam to meet the FY09 guidance without too much difficulty. Even in a conservative scenario in FY10, we expect company to deliver at least 10% earnings growth, which takes valuations near 10x P/E. Further, the stock has corrected the most since Infosys’ results (by 20%). Remain positive (relative to the sector) on Satyam, Buy with a one-year target price of Rs 445," says India Infoline's research report.

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