India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
India - IT Services (Rise of the fallen - 2):
Mid-cap IT vendors are starting to benefit because of the surge in demand for discretionary IT services. We believe that after lagging the larger vendors for nearly six quarters, revenue growth rates of mid-cap IT vendors are likely to catch-up with those of larger vendors. Also, worries over cost escalation have subsided. Consequently, we expect mid cap vendors’ EBITDA growth also to match that of larger vendors. Attrition rates still remain high. However, we derive comfort from the fact that stock prices of mid-cap IT vendors have underperformed larger vendors 25–30% in 2010 and are now trading at a P/E discount of 35-50%. With growth rates matching those of large vendors and minimal concerns of cost escalation, we expect a tactical re-rating of select mid-caps. Infotech Enterprises (ramp-ups at key clients) and Infinite Computers (cheapest valuations) are our preferred picks.
No comments:
Post a Comment