This mid cap IT stock has been battered down like anything by the FIIs during the recent fall of the sensex. It was quoting around 180+ and it went down to 45 in two weeks time.
Let us look at the details of this stock here. It book value is 81, and PE is 5.72. While IT industry PE is 12.29. Comparing it with the competition, you can see that it is quoting at discount to other companies. E.g. HCL tech book value 51 (CMP 167), wipro book value 71 (CMP 316).
It has presence in Global Imaging Software, Engineering related work. It is expected to get major orders from the nuclear deal with US.
On conservative estimates, if we consider its EPS to be 20 Rs/share compared to current 16 Rs/share. With PE of about 9 (if not 12 as per industry average), then it should be quoting at 180.
I recommend a buy or hold on Rolta for a target of 180 to 200 in 6 months.
Disclaimer: I have some stocks of Rolta at 56 Rs. Please do your due diligence before buying or selling a share.
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