Buy Tera Software; target of Rs 95: SKP Securities

SKP Securities is bullish on Tera Software and has recommended buy rating on the stock with a target of Rs 95 in its July 24, 2012 reports.

“Tera Software was originally incorporated on 26th Sept. 1994 as Tera Software Private Ltd. (TSL). TSL´s offerings include E-Governance; IT enabled services, System integration, networking, Software development and consultancy. TSL was the first company to successfully implement e-governance for e-registration in Kerala to provide the IT infrastructure for KAVERI PROJECT.”

“TSL is one of the early entrants to this vertical and has won credible projects from different state Govt.  TSL is now poised to bid for larger projects by leveraging its experience and early bird status in the e-governance domain. Central and State Governments are keen on implementing different projects to keep the activities of the Governments transparent, timely and cost effective.  There is an absolute increase in the fund allotment by the Governments for implementing the projects. TSL has healthy order book of Rs 821 cr, a positive in relation to 3.8x FY12 revenues and 2.4x FY13E revenues.  TSL’s strong order book reflects revenue visibility and execution track record of e-governance projects.”

“At current market price of Rs.63, TSL is trading at 2.8x FY13E & 1.6x FY14E earning. TSL continues its growth momentum in e-governance project across the states.  We recommend BUY rating on the stock with a target price of 95 (50%UPSIDE) over the period o f 14 month,” says SKP Securities research report.   

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