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Buy Firstsource Sol; tgt Rs 36.5: Aditya Birla Money
Aditya Birla Money is bullish on Firstsource Solutions and has recommended buy rating on the stock with a target of Rs 36.5 in its September 23, 2010 research report.
Aditya Birla Money is bullish on Firstsource Solutions and has recommended buy rating on the stock with a target of Rs 36.5 in its September 23, 2010 research report.
"Firstsource Solutions (FSL) derives 38% of its revenue from the world's largest healthcare spending economy and has a strong client position in both payers (Insurance) and providers (Hospitals) segment. FSL serves 5 out of the top 10 health insurance companies on the payer side and over 800 hospitals and physician groups on the provider side. FSL is currently trading at a consolidated P/E of 7.05x its FY12E EPS of Rs 4.06, which is at a deep discount to its historical average of 21x and global peers."
"Based on a) an improvement in the US financial markets, b) likely consolidation in the sector on account of vendor consolidation globally, c) huge domestic opportunity, d) stability of earnings, we believe that the current valuation which is at a substantial discount to its global peers, is unjustified. We believe that FSL is likely to get rerated. We have valued FSL at a P/E of 9x FY12E, giving us a target of Rs 36.5, implying a potential return of 27.7% from the last closing market price," says Aditya Birla Money research report.
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