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Summary
of Contents
STOCK UPDATE
Tata Consultancy
Services
Cluster:
Evergreen
Recommendation: Buy
Price target: Rs1,325
Current
market price: Rs1,192
Orders galore
Key points
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Large orders bagged: Tata Consultancy
Services (TCS) has bagged seven large outsourcing deals in the
past six weeks, amounting to a combined value of over $500
million. The clients are from diverse industry domains and
geographies.
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Boosting the Chinese operations: TCS has
secured a $100-million order from the Bank of China, which is one
of the largest outsourcing deals from China to an Indian vendor.
Moreover, the induction of the global technology major Microsoft
Corporation as a strategic investor with a 10% stake in its
Chinese subsidiary, TCS China, also augurs well for the company's
growth plans in China.
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Maintain Buy call: At the current market
price the stock trades at 29.3x FY2007 and 23.3x FY2008 estimated
earnings. We maintain our Buy call on the stock with price target
of Rs1,325.
Television Eighteen
India
Cluster: Emerging
Star
Recommendation: Buy
Price target: Under review
Current
market price: Rs895
TV18 enters stock broking business
Key points
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Web18, a subsidiary of TV18 India, has entered
into a partnership with Ambit and Centurion Bank of Punjab (CBoP)
to pursue stock broking business. In this venture Ambit and Web18
will hold a 40% stake each whereas CBoP will hold a 20% stake. It
will leverage the partners' complementary strengths.
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This deal puts Web18 in a completely new line
of business which allows it to put its niche Internet properties
to good use. Given the market's thumbs-up to the deal (evident
from the surge in CBoP price), the new TV18 stock is also expected
to trade higher by Rs45-60.
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Earlier TV18 had acquired CRISIL Marketwire.
Our estimates and the price target do not reflect the acquisition
and the latest deal with Ambit and CBoP. After the listing of TV18
(new) and gaining clarity from the management we will be revising
our estimates and price targets.
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We remain bullish on TV18 in view of the
company's compelling properties and the ability of its management
to monetise the
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