Buy Thinksoft Global; target Rs 125: Sunidhi Securities

Sunidhi Securities is bullish on Thinksoft Global Services (TGSL) and has recommended buy rating on the stock with a target price of Rs 125 in its January 28, 2013 research report.

"TGSL is a specialist in financial software testing with over 14-million person hour track records for Global 500 financial and insurance organisations in USA, UK, Europe, India and Asia-Pacific. Through its domain focus, structured testing methodologies, offshore delivery, and test automation expertise, Thinksoft helps clients realise 'business ready software', compress timelines, and reduce software product life cycle costs. As financial organizations across the globe grapple with increasing business pressures to innovate at lower costs, the potential for organizations such as Thinksoft Global in becoming an ‘assurance’ partner for these organizations is quite significant. This is evidenced in the increasing size, quality and complexity of engagements. The increasing M&A activity in the financial sector, consolidation, potential for right shoring, continuous product and technology innovation, interconnectivity and integration indicates bright prospects for the testing industry. As TGSL moves into the next fiscal, its leadership team is confident that the plans and action points put together by them will slowly but surely translate into superlative growth in the years to come to establish the orgnaisation as leader among specialists in IT services. TGSL has been selected by the Reserve Bank of India (RBI), through a rigorous selection process to be its preferred testing partner for the countrywide rollout of one of its major transformational initiatives. It is also participating in bidding for comprehensive testing of a strategic payment platform being undertaken by an Apex body. The Specialist BFSI testing space is growing at 30% annually and TGSL is well positioned to be a significant player with a good market share. TGSL is cementing sales partnerships with “domain” specialist firms to address mid tier clients and working on its new branding strategy to capitalize on these trends. In the last 14 years, TGSL has established a successful track record of handling large independent functional testing assignments. TGSL has established a global presence/ footprint in New York, London, Frankfurt, Singapore, Bangalore and Chennai. Continuous emphasis and investment in infrastructure, focus on SME segment and onsite revenue stream, growing business with existing clients, rapid growth in BFSI business, comprehensive range of service capabilities in the areas of testing and the Capex already completed give strong revenue visibility and profitability going ahead. At the CMP of Rs 84, the share is trading at a P/E of 3.4x on FY13E & 2.8x on FY14E. We recommend BUY with a target price of Rs 125 in the medium term," says Sunidhi Securities research report. Bodies Corporate holding more than 50% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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