Buy Allied Digital Services; target of Rs 326: Sharekhan

6799 Investors following Allied Digital. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy Allied Digital Services; target of Rs 326: Sharekhan

Sharekhan is billish on Allied Digital Services and has recommended buy rating on the stock with a target of Rs 326 in its December 08, 2010 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

ALSO READ See previous views by Sharekhan See what other Experts & Brokerages are saying about Allied Digital See messages about Allied Digital Allied Digital BSE | NSE 31/05/12 Are Mutual Funds betting on Allied Digital?

Sharekhan is billish on Allied Digital Services and has recommended buy rating on the stock with a target of Rs 326 in its December 08, 2010 research report.

"Allied Digital Services (ADSL) has built strong domain expertise in the remote infrastructure management services (RIMS) space in both the domestic and the overseas market (through En Pointe Global Services). The RIMS market is poised to grow at 30% compounded annual growth rate (CAGR) over 2008-13 to reach Rs  133,400 crore in 2013. Currently, only 7% of the total RIMS opportunity of Rs 480,000 crore is being addressed, which leaves huge room for further growth. As per industry reports, ADSL-with its impressive delivery mechanism (NOC), direct presence in 132 locations in India and 27 in the USA (through En Pointe Global Services) coupled with strong strategic alliances with the likes of Lenovo, Intel, LANDesk and PRESIDIO helps ADSL to garner incremental spending in the RIMS space."

"ADSL's management has indicated that growth will accelerate through both organic and inorganic routes as expansion in the RIMS space will be the top priority of the company in the coming year. On the other hand, ramping up the newer areas of growth like Cloud Computing, VDI, mobile mobility service and green data centre will be at the forefront of the management's priorities."

 "We remain positive on the long-term sustainability of the company's business model, with incremental thrust from the management on the high-margin RIMS business and a gradual decline in the low-margin segments. At the current market price of Rs 177, the stock trades at 6x FY2011 and 5x FY2012 estimated earnings. We maintain our Buy recommendation on the stock with a 12-month price target of Rs 326. At our price target, the stock will be valued at 9xFY2012E earnings," says Sharekhan research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment