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Buy OnMobile Global at declines: Asit C. Mehta
Asit C. Mehta has initiated a buy rating on OnMobile Global with a target price of Rs 234. Going forward the research firm believes that the company’s revenue will be able to register a 42% CAGR during FY08-10. At present the stock is trading a price of Rs 204.
Asit C. Mehta has initiated a buy rating on OnMobile Global with a target price of Rs 234 in its December 9, 2008 research report. "Going forward we believe that the company's revenue will be able to register a 42% CAGR during FY08-10. This is mainly on the back of rapid subscriber growth in the telecom industry along with the increased penetration of VAS services. At the same time technology platform and constant innovation acts as a differentiator for the company. The company also has cross operator presence, which gives it an opportunity to cross sell. The company is financially very strong and has a debt free balance sheet."
"Since OnMobile Global Ltd has made huge investments in technology, we have valued the company using price to book value multiple. Also due to various acquisitions made by the company, we have adjusted the book value for the goodwill arising on consolidation. Therefore on assigning the a Price /Book Value multiple of 2.2 (which is consistent with the valuation of foreign peers) to the FY10E book value of Rs 104.1, we arrive at a target price of Rs 234. At present the stock is trading a price of Rs 204, we initiate coverage on OnMobile Global ltd with a "BUY AT DECLINES" recommendation," says Asit C. Mehta's research report.
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To read the full report click on the attachment......
