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Personal Finance for Indian Investor => Multibagger Stock Recommendations => Topic started by: chetan on June 29, 2010, 12:24:07 PM
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Here is Goldman Sachs' Views on MPHASIS,
We believe that Mphasis could face pricing cuts in their larger business segment of application services with effect from 3QFY10E. This is a part of the semi-annual pricing revisions with HP-related businesses as per the Master Service Agreement (MSA). Hence, we incorporate a 5%/2.5% cut in pricing in 3QFY10E and 1QFY11E, respectively, in the application business. We lower our EPS estimates by 10%/12.6% for FY11E/FY12E and our target price to Rs681 (from Rs842) to reflect these potential developments. In our view, the possible pricing cuts are factored into the share price at current levels. Hence, we maintain our Buy rating on the stock, as it currently trades at inexpensive valuations and continues to offer high cash returns.