Merrill Lynch has maintained buy rating on Rolta target price of Rs 720 in its January 23, 2008 report. "Rolta has acquired Broech Corporation, a Chicago based IT consulting company employing over 160 consultants. TUSC (business name of Broech Corp) specializes in Oracle based ERP applications, database and business intelligence solutions with strong presence in Rolta’s current business segments. TUSC derives 100% of revenue from North American clients. This acquisition imparts Rolta ability to offer database related services supporting GIS/engg services data. Our PO on the local shares, at Rs 720, is at 16x estimated 1yr fwd earnings, at a discount to FY08e PE of 18x. Our GDR PO, at USD 18.0, is at par with the local PO. Risks: a) Non-annuity nature of business b) risk related to possible acquisitions c) risk posed due to high dependence on partnerships d) industry wide risk of increasing wages, increasing taxes, Rupee appreciation," says Merrill Lynch report.
Resources:- Indiaearnings.com
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