Buy 3i Infotech, target of Rs 180: Sharekhan

Sharekhan has maintained its buy rating on 3i Infotech with price target of Rs 180 in its May 2, 2008 research report. "3i Infotech's consolidated revenues grew by 10.3% quarter on quarter (qoq) and 66.5% year on year (yoy) to Rs 349.9 crore in Q4FY2008. While, the organic revenue growth was 7.1% sequentially, acquisitions contributed 3.2% to the sequential growth in the top line during the quarter. The operating profit margin (OPM) was flat at 24.8% in Q4FY2008. The operating profit grew 9.9% qoq to Rs 86.7 crore during the quarter. The company's net profit grew by 0.6% to Rs48.8 crore, which was below our expectation of Rs 53.7 crore."

"To fine tune our earning estimates, we have revised up the earning estimates for FY2009 by 3.4% and have introduced FY2010 earning estimates. Our earning estimates does not incorporate Regulus acquisition since the regulatory approval for the same is yet to be obtained. At the current market price, the stock is trading at 9.8x FY2009 and 8.4x FY2010 earning estimates. We maintain our Buy recommendation on the stock with price target of Rs 180, says Sharekhan's research report.

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