Will take MphasiS many quarters to regain credibility, says Motilal Oswal
Brokerage house Motilal Oswal has downgraded its earnings estimate and price target for software services firm MphasiS, citing pressure on revenues and margins.
March 22, 2011 / 22:52 IST
Brokerage house Motilal Oswal has downgraded its earnings estimate and price target for software services firm MphasiS, citing pressure on revenues and margins.
The broking firm now expects MphasiS to report an earning per share of Rs 40.80 for financial year 2011-12 (October-September), against the earlier estimate of Rs 47.70. For the current financial year, the brokerage has forecast the company's EPS at Rs 40, and has set a price target of Rs 450 for the stock."Lower growth guidance for the HP channel and muted margin expansion have led us to downgrade MphasiS' earnings and target price. It is possible that the company has set a low bar of expectations for now. However, we believe, it will take MphasiS multiple quarters of good execution to rebuild credibility," said the Motilal Oswal note to clients.Don't Miss Out: Buy or sell: Will strategy change work for MphasiS?The stock was hammered last month at the time of the company's first quarter earnings announcement. Investors were outraged that the company had not disclosed details about certain one-time earnings in the previous quarter, and also did not give the break-up of its latest revenues.At 11.14 IST, MphasiS shares were traded at Rs 385, up 2% over the previous close. The stock is down 41% over the last one month.Also Read: MphasiS says will not drop rate card for parent HP Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
