CM Price: Rs168.50
Price Target: Rs225.00
A leveraged play to the recovery in financial services IT spending
• Initiate coverage with OW and Jun-10 P/E-based price target of Rs225; 50% upside: Polaris is one of the most leveraged plays in the Indian IT sector to the recovery of the global banking, financial services and insurance industries (BFSI), with 90% of its revenue from this segment. With Citibank already an anchor client and investor, we believe the global recovery is leading to good business traction at Polaris. We expect this traction to drive a 26% EPS CAGR over FY10- 12, leading to a gradual stock re-rating, driving our positive view.
Target price Rs80
CMP Rs71.00
Grand design
GMR is India’s leading infrastructure company, with presence in airports, power, roads and special economic zones (SEZs). GMR’s superior airport assets (Delhi, Hyderabad & Sabiha Gokchen) have high growth potential with monopoly characteristics & downside protection. The company’s domestic power portfolio consists of 823MW operational capacity and another 6,860MW is in pipeline; it also has 631Kms of road projects. GMR has expanded international footprint with the acquisition of coal mines (188mnte), InterGen (~7,700MW installed power capacity) and Island Power Singapore (800MW). GMR has demonstrated astute ability to garner high quality and big-ticket projects with significant upside potential.