Accumulate Mahindra Satyam; target of Rs 125: KRChoksey
KRChoksey is bullish on Mahindra Satyam and has recommended accumulate rating on the stock with a target of Rs 125 in its May 17, 2013 research report.
KRChoksey`s research report on Mahindra Satyam
“Mahindra Satyam, revenue growth (flat on QoQ basis) was in-line with our expectation in Q4 FY13. However, decline in EBITDA margin by 146 bps QoQ was significantly higher than our projection (i.e. decline by 70 bps QoQ) primarily led by change in methodology for computing leave encashment.” “Satyam continues to trail Indian IT industry growth rate in FY13. We believe, the company will continue to laggard the industry in FY14E on account of couple of factors (a) High dependence on discretionary spend by clients (ERP contributes 40%+ of Satyam’s total revenue; (b) The company is yet to establish itself as a major player in Infrastructure Management space; and (c) Large deals team recently set-up will take time to show results. The management sounds confident of maintaining EBITDA margin in narrow band from the current level (i.e. 20.1%), going forward, supported by operating levers such as widening of employee pyramid base, further improvement in utilization rate by couple of points and rationalization of SG&A expenses.”Also Read: Buy Mahindra Satyam; target Rs 126: Angel Broking“We believe the company is trading at attractive valuation and expect it to re-rate with the positive announcements such as approval by High Court for merger with Tech Mahindra (which is likely to be announced by 2nd week of June 2013) and signing of large deals with clients. Considering the same we maintain our "ACCUMULATE" recommendation on the stock,” says KRChoksey research report.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. 
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