Satyam Computer Services an outperformer: Karvy

Karvy Stock Broking has maintained its outperformer rating on Satyam Computer Services with a target price of Rs 555 in its July 9, 2008 research report. "Against modest revenue growth guidance given by the company (of Rs 25–25.1 billion) we expect the company to achieve revenues of Rs 26.25 billion–which translates into a sequential growth of 8.6%. The impact of the rupee depreciation is likely to have a positive impact on the margins and we expect the margins to expand by 80bps to 23.6% in Q1FY09. As a result we expect the operating profit to grow by 12.6%, which is the highest in our coverage universe."

"Though there is going to be a treasury loss, and even after factoring slightly higher effective tax rate, we expected the adjusted net profit to grow by 9.6% sequentially. At the current valuations of 15.8xFY09E and 13.5xFY10E, we continue to maintain with out performer rating, target Rs 555," says Karvy's research report.

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