Goldman Sachs starts Tech Mah, Mah Satyam coverage with buy

Shares of software services provider Tech Mahindra rallied nearly 3 percent on Thursday after the foreign research house Goldman Sachs initiated coverage on the stock with a buy rating.

According to the report, the stock has a target price of Rs 1,300.

Goldman Sachs expects the company's dollar revenues rising 9 percent compounded annual growth rate (CAGR) between financial year 2012-13 and 2014-15.

At 10:21 hours IST, shares went up 2.76 percent to Rs 1,069.50 on Bombay Stock Exchange.

In the previous trading session, the share was down 0.48 percent to Rs 1,040.75 after the long-pending merger between Tech Mahindra and Mahindra Satyam (erstwhile Satyam Computer Services) was postponed.

Speaking to CNBC-TV18 on March 28, Sonjoy Anand, CFO, Tech Mahindra called it just a procedural step but clarified that the merger is not getting delayed by six months. In fact, he says, scheme was valid only till March 31, 2013, it has only been extended to September 30, 2013 to get approval from Andhra Pradesh High Court.

Goldman Sachs also recommended a buy rating on Mahindra Satyam with a target price of Rs 153.

Shares rallied 2.33 percent to Rs 129.30, continuing upmove for the second consecutive session.