Saturday 4 October 2008

Reduce HCL Tech, target of Rs 235: IIFL

IIFL has recommended a reduce rating on HCL Technologies with a 12 month target of Rs 235 in its September 29, 2008 research report. "We expect HCL Tech’s offer of 650p/share for Axon to elicit a counterbid from Infosys. Should this trigger a bidding war, it could significantly increase the premium over the initial price. Recent acquisitions of Corus by Tata and of Repower by Suzlon happened at 35-45% premiums over initial bid prices."

"At Axon’s median 1-year-forward PER, the eventual winner-Infosys or HCL Tech would have to offer 720p, or 20% more than the initial bid. At the initial price, we estimated the acquisition was just about earnings-neutral for Infosys. However, with the price likely to be higher now, the acquisition would likely be earnings dilutive for both the firms, Reduce, 12 month target of Rs 235," says IIFL's research report.


Source: MoneyControl

Posted by Harsh at 07:48

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