Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Mahindra Satyam (Satyam) has enterprise business solutions (EBS) (~40% of
revenue) and manufacturing (~32% of revenue) as its anchor service line and
vertical, respectively, which is showing strong traction. Hence, we expect the company
to grow at a revenue CAGR of 15.3% and 15.9% in USD and INR, respectively.
Satyam has adequate margin levers such as 1) employee pyramid rationalization
(number of employees <3 years of experience are very less at ~24% vis-à-vis
industry at 40-45%; 2) strong volume growth expected on the back of a strengthening
deal pipeline expected to improve utilizations to 77% by FY2013; and 3) current
SGA at ~20.5% of sales, which can be brought down to 19.0% by FY2013.
We expect the company to maintain its growth momentum as recorded over the
past few quarters and grow at rates comparable to its peers at a 15.3% CAGR in
USD revenue and a 31.5% CAGR in earnings over FY2011-13E. At the CMP of
`70, the stock is trading at a 9.6x FY2013 EPS of `7.3 i.e., at a PEG of 0.30x. We
value the stock at 40% discount to Infosys' target FY2013 PE i.e., 11.0x and
recommend it as one of our top picks with a target price of `81.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Mahindra Satyam (Satyam) has enterprise business solutions (EBS) (~40% of
revenue) and manufacturing (~32% of revenue) as its anchor service line and
vertical, respectively, which is showing strong traction. Hence, we expect the company
to grow at a revenue CAGR of 15.3% and 15.9% in USD and INR, respectively.
Satyam has adequate margin levers such as 1) employee pyramid rationalization
(number of employees <3 years of experience are very less at ~24% vis-à-vis
industry at 40-45%; 2) strong volume growth expected on the back of a strengthening
deal pipeline expected to improve utilizations to 77% by FY2013; and 3) current
SGA at ~20.5% of sales, which can be brought down to 19.0% by FY2013.
We expect the company to maintain its growth momentum as recorded over the
past few quarters and grow at rates comparable to its peers at a 15.3% CAGR in
USD revenue and a 31.5% CAGR in earnings over FY2011-13E. At the CMP of
`70, the stock is trading at a 9.6x FY2013 EPS of `7.3 i.e., at a PEG of 0.30x. We
value the stock at 40% discount to Infosys' target FY2013 PE i.e., 11.0x and
recommend it as one of our top picks with a target price of `81.
No comments:
Post a Comment