Feb 27, 2013, 12.13 PM | Source: Moneycontrol.com
Firstcall Research has recommended hold rating on Oracle Financial Services Software with a target price of Rs 3353, in its February 25, 2013 research report.
, Firstcall Research |
"Oracle Financial Services Software (formerly Iflex solutions) is a leading provider of applications and professional services for the financial services industry. Oracle has signed up with a leading banking in South Africa for Oracle Financial Services Analytical Applications Suite. Oracle has acquired with Acme Packet for $29.25 per share or approximately $1.7 billion, net of Acme Packet's cash. During the quarter ended, the robust growth of Net sales is increased by 6.79% to Rs. 7261.60 million. During the quarter, 11 customers signed up for the products. Oracle has signed licenses fees of US$ 13 million in the quarter. Banca Transilvania Romania signed for Oracle FLEXCUBE to replace aging existing application from Misys. Oracle has successfully completed deployment of Oracle FLEXCUBE Investor Services in UK for leading Tier I Global Bank. The company wins new products span for the China, Malaysia, Myanmar, Venezuela, South Africa, Korea, and United States. Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 7% over 2011 to 2014E respectively.
The company's net profit jumps to Rs.2552.10 million against Rs.2516.80 million in the corresponding quarter ending of previous year, an increase of 1.40%. Revenue for the quarter rose 6.79% to Rs.7261.60 million from Rs.6800.10 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.30.37 a share during the quarter, registering 1.31% increase over previous year period. Profit before interest, depreciation and tax is Rs.3881.50 millions as against Rs.4012.90 millions in the corresponding period of the previous year.
Outlook and Conclusion: At the current market price of Rs.2980.00, the stock P/E ratio is at 23.27 x FY13E and 21.33 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.128.05 and Rs.139.69 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 7% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 12.62 x for FY13E and 11.13 x for FY14E. Price to Book Value of the stock is expected to be at 3.42 x and 2.95 x respectively for FY13E and FY14E. We recommend 'HOLD' in this particular scrip with a target price of Rs 3353 for Medium to Long term investment," says Firstcall Research report.
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