Thursday, 6 November 2008

3i Infotech target of Rs 59: Asit C. Mehta

Asit C. Mehta has reduced target price of 3i Infotech to Rs 59 (7x FY10E EPS of Rs 8.4) from Rs 161 earlier. "The sequential growth in revenues for Q2 FY09 was 28.4%, i.e. from Rs 4,685 million to Rs 6,016 million. Net profit margins declined by 93 bps to 11.4% in Q2 FY09. The decline in net profit margins was also due to the sequential increase in tax rate by 90 bps."

"We have amortized the goodwill arising on consolidation, over a span of 10 years, and considering the same, EPS for FY09E comes to Rs 7 as against Rs 14.7 (without considering amortization) and for FY10E to Rs 8.4 as against Rs 16 (without considering amortization). We reduce our target price to Rs 59 (7x FY10E EPS of Rs 8.4) from Rs 161 earlier," says Asit C. Mehta's research report.

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Source: Moneycontrol

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