Buy 3i Infotech; target of Rs 116: Sushil Finance

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Sushil Finance is bullish on 3i Infotech and has recommended buy rating on the stock with a target of Rs 116, in its January 30, 2010 research report.

"3i Infotech has delivered a flat performance during 9MFY10. However, the Company expects the business environment to improve going forward and is also confident of improving its volumes. Moreover, with acquisition of JPMT Services' Retail Lockbox Business, its Transaction Services business is also expected to produce decent performance going forward. During Q3FY10, 3i also decided to exit from its Citizen Service Center project in some of the states by paying a onetime aggregate compensation of Rs 109.2 million, which will result in significant cost reduction in terms of further capex. 3i has a well-balanced business mix in terms of geographical spread & portfolio of offerings and is well placed to benefit from an improving global business environment."

"Going forward, based on 9MFY10 performance, we have increased our APAT estimates for FY10E, but have kept our FY11E APAT estimates unchanged. At the CMP of Rs 82, the stock is available at an attractive valuation of 5.8x FY10E earnings of Rs 14.2 & 5.1x its FY11E earnings of Rs 16. We maintain our "BUY" rating on the stock, with a price target of Rs 116."

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