Buy RS Software; target Rs 182: BP Equities

BP Equities' report on RS Software (India)

"RS Software (India), in view of the immense potential in the electronic payment industry, the company's ability to maintain long term relationships with clients, in-depth understanding of the entire life cycle of the payment industry, and increased investment in the sales engine to win more clients and diversify geographically, we believe the company is well poised to register a growth rate in the range of high teens. The company has a strong balance sheet with zero debt as on FY13, strong management team, Rs 573 mn of cash & cash equivalents ( ~38 percent of market cap and Rs 47/share) and impressive PAT/operating cash flow ratio of 124 percent, which bolsters our confidence. At CMP the company trades at a P/E of 3.2x and 2.8x FY14E and FY15E P/E respectively, which we believe is cheap considering the immense growth opportunities and strong fundamentals. We give a BUY rating on the stock with a target price of Rs 182 ( ~4 times FY15E earnings, an upside of ~45 percent from CMP)," says BP Equities 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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