Satyam Computer Services is expected to see its business stabilise by 2009-end, with growth picking up in 2010.
Investment bank J P Morgan has assigned an overweight rating to scam-tainted Satyam.
"Satyam is now an investible stock in our view and we have reinitiated with an 'overweight' and a price target of Rs 100" reports quoted Bhavin Shah, managing director of JP Morgan in India as saying.
JP Morgan estimates Satyam's revenue to grow 9 per cent in fiscal 2010-11 and by 19 per cent in fiscal 2011-12, respectively. It expects the Satyam scrip at Rs100 level based on the 10 June price to earnings ratio.
While Satyam's quarterly revenue may decline to Rs1,500 crore per quarter, Shah expects its FY11 revenue to grow at 7 per cent. He estimates earnings per share in fiscal 2010 to be around Rs3.90 per cent and in fiscal 2011 at around Rs11.
The fraud-hit Satyam Computer Services, which on Tuesday revealed a Rs181 crore net profit in the October-December 2008 quarter, and a bank balance of around 370 crore as of March 2009, still faces legal and other claims of up to Rs10,000 crore.
These include creditors' claims on Satyam over its acquisitions besides the billion-dollar fraud litigation with UK firm Upaid and another billion dollar worth of claims filed by its US shareholders.
As many as 37 'unacknowledged' creditors have demanded about Rs1,230 crore, including Rs400 crore related to four overseas acquisitions Satyam made under the leadership of its disgraced founder B Ramalinga Raju.
These include the acquisitions of the Market Research and Customer Analytics business unit of US-based Caterpillar, strategy and general management consulting firm Bridge Strategy Group LLC of Chicago (US), supply chain management consultancy firm S&V Management Consultants based in Belgium as also the acquisition of a 50 per cent stake in a JV with Venture Global Engineering LLC.
In some cases, parts payments are yet to be made, which along with other claims made against the company total about $100 million.
Most of the claims, however, surfaced after Satyam founder chairman Ramalinga Raju confessed of financial irregularities at the IT firm early this year.
Satyam said it will vigorously defend the class action suit filed in the US and the claims filed by UK firm Upaid in a Texas (US) court, while it may try to settle most of the other cases amicably.
"The company has not yet been required to reply to the complaints but anticipates that, in accordance with US procedures it will vigorously defend itself," Satyam said on the law suits.
"The company has received letters from 37 companies requesting for confirmation of sums allegedly owed by Satyam to them. The aggregate of sums claimed to be owed is Rs 1,230 crore," Satyam said while disclosing the financials for the quarter ended December 2008 and the first two months of 2009.
"The company has not acknowledged these claims till date. The matter is under investigation by various authorities," Satyam added.
However, investment bank JPMorgan has assigned an overweight rating to the Satyam scrip. "Satyam is now an investible stock in our view and we have reinitiated with an 'overweight' and a price target of Rs100," reports quoted an analyst with the firm as saying.