Buy Zylog Systems; target of Rs 482: Firstcall Research

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Buy Zylog Systems; target of Rs 482: Firstcall Research

Firstcall Research is bullish on Zylog Systems and has recommended buy rating on the stock with a target of Rs 482 in its December 1, 2011 research report.

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Firstcall Research is bullish on Zylog Systems and has recommended buy rating on the stock with a target of Rs 482 in its December 1, 2011 research report.

"Zylog Systems, established in 1996, is an ISO 9001 certified provider of Onshore, Offshore & Near shore technology solutions and services to enterprises & technology companies across the globe. The company works with some of the world's leading innovative ISVs and software-enabled businesses, ranging from start-ups to establish industry leaders. Zylog Systems is a Public Limited Company, listed in the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. It provides complete Product Lifecycle Management services, ranging from new product development and product advancement to product migration, re-engineering, sustenance and support. By leveraging their experience in product engineering, they bring products to market faster, with high quality and reduced costs."

"Zylog Systems Ltd disclosed results for the quarter ended Sep 2011. Net sales for the quarter moved up 5% to Rs.5003.75 million as compared to Rs.4744.67 million during the corresponding quarter last year. During the quarter, the company has reported Net Profit increased to Rs.490.54 million from Rs.375.26 million in previous year same quarter. The Basic EPS of the company stood at Rs.29.83 for the quarter ended Sep 2011."

"At the current market price of Rs.422.25, the stock is trading at 3.86 x FY12E and 3.42 x FY13E respectively. Price to Book Value of the stock is expected to be at 0.82 x and 0.66 x respectively for FY12E and FY13E. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.116.44 and Rs.131.48 respectively. Company provide complete Product Lifecycle Management services, ranging from new product development and product advancement to product migration, re-engineering, sustenance and support. Net Sales and PAT of the company are expected to grow at a CAGR of 34% and 28% over 2010 to 2013E respectively."

"During the quarter, the company has reported Net Profit increased to Rs.490.54 million from Rs.375.26 million in previous year same quarter. The company has been listed in the information Week 500, an annual listing of the most innovative users of business technology in the US. On the basis of EV/EBITDA, the stock trades at 1.89 x for FY12E and 1.70 x for FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 482 for medium to long term investment," says Firstcall Research report.

Public holding more than 90% in Indian cos

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To read the full report click on the attachment