Dec 04, 2012, 03.11 PM IST
Bangalore based information technology services company MphasiS fell more than 2 percent intraday on Tuesday after the foreign research firm UBS has recommended a sell rating on the stock with a target price of Rs 285 (that is 29 percent lower compared to Monday's closing price).
The UBS in its report said, "The Digital Risk transaction is likely to be margin dilutive and may have a minimal near-term impact on earnings."
A subsidiary of Hewlett-Packard Company had entered into definitive agreement to acquire Orlando, Florida-based Digital Risk LLC in an all cash deal worth USD 175 million plus an additional earn-out component.
Digital Risk provides highly specialised risk, compliance and transaction management solutions for the mortgage industry. The company is licensed to operate in 46 states in the US and its Making Mortgages Safe solutions suite is deployed by over 15 blue chip clients across key mortgage constituencies -- originators, insurers, issuers and investors, MphasiS, owned by computer maker Hewlett Packard, said.
At 12:24 hours IST, MphasiS slipped 1.71 percent to Rs 394.05 amid high volumes. Yesterday the share went up 3.22 percent to close at Rs 400.90.
MphasiS stock price
On December 10, 2013, MphasiS closed at Rs 392.80, up Rs 1.45, or 0.37 percent. The 52-week high of the share was Rs 513.00 and the 52-week low was Rs 335.00.
The company's trailing 12-month (TTM) EPS was at Rs 25.67 per share as per the quarter ended October 2013. The stock's price-to-earnings (P/E) ratio was 15.3. The latest book value of the company is Rs 172.83 per share. At current value, the price-to-book value of the company is 2.27.
Action in MphasiS
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