Accumulate CMC; target Rs 1530: P Lilladher
Brokerage house Prabhudas Lilladher is bullish on CMC and has recommended 'Accumulate' rating on the stock with a price target of Rs 1,530 in its research report dated October 14, 2013.
October 16, 2013 / 18:41 IST
Prabhudas Lilladher's report on CMC
"CMC reported revenue growth of 15.2 percent QoQ to Rs5,608m (PLe: Rs5,523m, Cons: Rs5,446m). However, EBITDA margin was flattish at 15.8 percent (PLe: 18.2 percent, Cons: 17.1 percent) due to wage hike, absorbing currency tailwind. PAT grew by 26.7 percent to Rs673m (PLe: Rs692m, Cons: Rs733m) due to lower ETR of 20 percent (Q1FY14: 34 percent). CMC reported strong growth in System Integration (31 percent QoQ) and IT Enabled Services (16 percent QoQ). CMC has delivered 23 percent QoQ growth in international business. The company has joint go-to-market strategy with TCS. We see strong international performance for TCS as a positive rub-on impact on TCS' perform.""CMC reported Q2FY14 results below our/consensus expectation. The company reported revenue touch ahead of expectation; however, the disappointing margin performance was due to wage hike. The performance was ahead of expectation in System Integration & ITES. We reiterate our 'Accumulate' rating, with a revised target price of Rs 1,530 (from Rs1,600) as we tweak our estimates downwards for revised currency estimates. The company reported 19 new client additions and 23 percent QoQ growth in the international business," says Prabhudas Lilladher 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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