“Mphasis 1QFY10 results were in line with expectations, excluding impact of higher than anticipated forex gains on revenue and other income. EBITDA margins were in line with expectations at 26.3% (v/s est. of 26.4%) and profits were flattish, excluding impact of forex gains. The stock quotes at P/E of 13.9x FY10 (YE Oct) and 13.3x FY11 earnings. We downgrade the stock to Neutral, with a target price of Rs 710, based on 14x FY11 earnings. We expect pricing cut from its parent HP and uncertainty on applications pricing going forward to weigh on the stock in the interim. Lower than anticipated pricing declines can provide upsides to our estimates, “says Motilal Oswal research report.

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Sunidhi Securities & Finance has recommended a buy rating on Indian Overseas Bank with a price target of Rs 60 in its March 25, 2009 research report.

“Indian Overseas Banks’ total business as on December 31, 2008 rose from Rs 1,33,413 crore as at end December 2007 to Rs 1, 62, 575 crore-a growth of 22%. Total deposits grew by 15% to Rs 90, 866 crore from Rs 78, 791 crore. Advances spurted 31% in Q3FY09 to Rs 71, 709 crore from Rs 54, 6222 crore (YoY). As at December 31, 2008 IOB�s CASA (current accounts saving accounts) is marginally down to 29.23% from 30.93% (YoY).”

“During Q3FY09, total income rose 40% to Rs 3204 crore and net profit by 26% to Rs 388 crore. NIM and NP margin stood at 3.14% % and 12.4% respectively. Its balance sheet grew by 31% to Rs 19, 747 crore (YoY). We recommend BUY with a target of Rs 60 in the medium term,” says Sunidhi Securities & Finance’s research report.

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