Broking house, Sharekhan is bullish on ORG Informatics and has recommended buy rating on the stock with a price target of Rs 190.
Sharekhan report on ORG Informatics:
Acquisition of DGIT Solutions
"ORG Informatics (ORG) has acquired 100% stake in Singapore-based DGIT Solutions Pte Ltd. Earlier, ORG had successfully raised $10 million through a global depository receipt (GDR) issue in the overseas markets. The issue had been priced at around Rs155 per share and resulted in a dilution of the equity base by 28.6 lakh shares. The company had also considered a preferential issue of 6 lakh warrants to its investors; the same has now been put on the backburner. Instead the company is considering dilution of equity through a fresh issue of shares for its future acquisitions. The additional dilution will be in line with the preferential issue of warrants considered earlier."
Valuation
"At the current market price ORG trades at 18.3x its FY2007 and 12x FY2008 estimated earnings. We would be revising our numbers on obtaining further clarity on the profiles of ORG's upcoming acquisitions. We maintain our Buy recommendation on the stock with a price target of Rs 190."
