Buy SQS India BFSI; target of Rs 850: Bonanza

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Bonanza's reserach report on SQS India BFSISQS India BFSI is a specialist in financial software testing with over 15-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, SQS India BFSI helps clients realise 'business ready software', compress timelines, and reduce software product life cycle costs. In the last 16 years, SQS India BFSI has established a successful track record of handling large independent functional testing assignments.SQS India BFSI has established a global presence/ footprint in New York, London, Frankfurt, Singapore, Bangalore and Chennai. SQS India BFSI is the Winner of the Deloitte Tech Fast 50 India and Tech Fast 500 AsiaPac – 2006, 2007 and 2008. SQS India BFSI is ISO 9001:2000 certified for 'Providing offshore testing and documentation.SQS India BFSI (previously named Thinksoft Global Services Ltd), a specialist in financial software testing has consistently increased its revenue for the past 10 years by growing at a CAGR of 25%. Post acquisition of Thinksoft Global Services Ltd by SQS AG (parent), a world’s leading specialist in software quality, SQS India BFSI may benefit from its parent’s BFSI clients and presence across the globe. We expect SQS India BFSI Revenues to grow at a CAGR of 16.6%, EBITDA to grow at a CAGR of 23% and PAT to grow at a CAGR of 28.8% over FY15-17E based on increased focus towards US and European areas and greater offshore delivery over the period. We have valued SQS India BFSI based on 26x of its FY17E EPS of Rs 33 arriving at a target price of Rs 850. Hence we recommend a BUY on SQS India BFSI with potential upside of 21% from CMP for a horizon of 12-18 months period.For all recommendations, click here 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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