Fwd: Mphasis Company Update; Challenges persist; Reduce; Target: Rs325

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Deepak Vaishnav

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Dec 14, 2011, 7:20:07 AM12/14/11
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Mphasis Ltd

Challenges persist

 

REDUCE

 

CMP: Rs326                                        Target Price: Rs325

We hosted Mr Ganesh Murthy, CFO, Mphasis for investor meetings in Mumbai recently. We present key takeaways:

n     Challenges within core HP Enterprise Svcs continue, co expects increased traction in HP Technology Svcs and HP Imaging and Printing Group

n     Direct channel revenue growth to remain strong. Recent deal wins in domestic business lend visibility

n     Co targeting EBIT margins of 15-18% in FYOct’12. Lower investments in Javelina, absence of RSU charge, fresher hiring and consolidation of facilities to drive margins up 

n     Inexpensive valuations at ~9x FYOct’11/Oct’12E EPS with cash at ~26% of mktcap limits downsides. Improvement in op performance needs to preclude stock upsides 

 

Regards,

Manik Taneja

Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : manik....@emkayglobal.com 

Board No. : +91-22-66121212 | Extn. : 253 | DID : 66121253 | Mob : +919833934924 |

 


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