Satyam seen investible despite Rs10,000-crore claims

10 June 2009

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.