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http://www.kotaksecurities.com/pdf/dmb/MorningInsight06032012.pdf
R SYSTEMS INTERNATIONAL LTD (RS)
PRICE: RS.157 RECOMMENDATION: REDUCE
TARGET PRICE: RS.140 CY12 PE: 8.3X
R Systems' 4QCY11 results were lower than our expectations. Volumes were
almost flat and so were the EBIDTA margins. The company won 9 new
accounts during the quarter. The macro scene has remained uncertain
though R Systems has not felt any impact of the same, as yet. R Systems has
a predominantly project - based business, which is relatively more
vulnerable to macro shocks. We maintain that, only higher consistency in
revenue will lead to better margins and attract higher valuations for the
stock. The stock has moved up in the recent past on the back of an open
offer for 26% by an individual investor, Mr. Bhavook Tripathi. We
downgrade the stock to REDUCE. The DCF-based price target stands revised
to Rs.140 (Rs.124) based on CY12E earnings. Earnings per share stand at
Rs.18.6 for CY12. The high amount of (net) cash in the balance - sheet of
about Rs.88 per share by CY12E end may act as cushion. A delayed recovery
in developed economies and a sharper-than-expected appreciation in rupee
v/s major currencies can pose risks to our estimates.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/dmb/MorningInsight06032012.pdf
R SYSTEMS INTERNATIONAL LTD (RS)
PRICE: RS.157 RECOMMENDATION: REDUCE
TARGET PRICE: RS.140 CY12 PE: 8.3X
R Systems' 4QCY11 results were lower than our expectations. Volumes were
almost flat and so were the EBIDTA margins. The company won 9 new
accounts during the quarter. The macro scene has remained uncertain
though R Systems has not felt any impact of the same, as yet. R Systems has
a predominantly project - based business, which is relatively more
vulnerable to macro shocks. We maintain that, only higher consistency in
revenue will lead to better margins and attract higher valuations for the
stock. The stock has moved up in the recent past on the back of an open
offer for 26% by an individual investor, Mr. Bhavook Tripathi. We
downgrade the stock to REDUCE. The DCF-based price target stands revised
to Rs.140 (Rs.124) based on CY12E earnings. Earnings per share stand at
Rs.18.6 for CY12. The high amount of (net) cash in the balance - sheet of
about Rs.88 per share by CY12E end may act as cushion. A delayed recovery
in developed economies and a sharper-than-expected appreciation in rupee
v/s major currencies can pose risks to our estimates.
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