They remain optimistic on recovery of the outsourcing industry and believe that HP lineage would continue to
help Mphasis deliver stronger-than-its-peer growth.

They believe that the company should be able to maintain its revenue momentum (CQGR: 5%). We reiterate our ‘Accumulate’ rating, with a target price of Rs840, a target multiple of 16x FY11e earning estimates.

They believe RPL and KG gas commencement will lead to the market now focusing on FY11 earnings (which capture the impact of both), prompting us to give equal weightage to a multiple-based methodology as well as an SOTP while deducing our target price.

They recommend a “HOLD” on the stock with a target price of Rs.400.00.

We continue to remain positive on Thermax’ long-term business prospects and its possible entry into super critical boiler business in the near term. Nonetheless, the quantum of settlement charges has surprised us negatively. The management has however indicated that there are no more litigations of such nature in the offing.

Hence, we maintain our adjusted earnings estimates at Rs22.7 for FY2010 and Rs29.7 for FY2011. At the current levels, the stock is trading at 21.3x FY2011 earnings per share (EPS) and 17.3x FY2012 EPS. We maintain our Hold recommendation on the stock with a price target of Rs662.

We upgrade Bharti Airtel (BAL) to BUY from Hold as its entry into Africa via Zain’s African assets (ZAF) is positive from a long-term horizon and reduces the risk of intense competition in India. BAL has bid for ZAF (excluding Sudan & Morocco) at US$10.7bn.

The acquisition will give BAL control over ZAF and we believe while valuations are at a premium based on FY10E EV/E of 9.6x, the strategy will pay rich dividends in the long term. ZAF’s assets have been impacted in terms of growth and profitability by the currency devaluation and poor economic conditions. ZAF’s revenues declined 12% through 9MFY09 (annualised), but grew 5% based on constant currency.

The ZAF acquisition is likely to lead to only 6% EPS dilution in FY12E (the second year of acquisition) and be EPS-accretive from FY13. We see the current fall in BAL’s stock price (11% post announcement) as a chance to accumulate since the performance will likely improve post more clarity on the deal structure and business fundamentals. Upgrade to BUY.

1. HIGH DEBT
2. REASONS FOR NO CASH FLOW
3. ALL GIVEN PROJECTIONS HAVE NOT BEEN ACHIEVED
4. NO STATUS ON DECLARED PROJECTS
5. SHADY ACCOUNTING TREATMENTS
6. FINANCIAL CFO / CEO, DIRECTORS ARE NON TRANSPARENT
7. SAME MANAGMENT OF INDUS NETWORKS CURRENTLY TRADING AT RS.2.95
8. INFLATED FUNDS DEPLOYMENT AND ACQUISTION OF PAPER COMPANIES
9. EXODUS OF SENIOR STAFF ….?

They are positive on the growth prospects of the company and recommend BUY the stock with a price target of Rs.287 over a 12month horizon implying upside potential of 35%.