3i Infotech
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs186
Current market price: Rs148
Revenue guidance may be upgraded
According to media reports, 3i Infotech may raise its revenue growth guidance upwards for the current fiscal due to the incremental revenues from the inorganic initiatives taken over the last few months. The three acquired companies, Innovative Business Solutions Inc, FormulaWare Inc and SDG Software Technologies, have cumulative annual revenue run rate of around USD$10 million. Consequently, the management has indicated that the revenue growth guidance of 25-30% given earlier may be revised upwards in the forthcoming board meeting next month.
SKF India
Cluster: Apple Green
Recommendation: Buy
Price target: Rs406
Current market price: Rs270
Rolled up to Rs406
SKF India's transformation from a product company to an engineering solution provider will reduce its dependence on the automobile sector (which is cyclical in nature) and could act as a big re-rating trigger for the stock. We maintain our Buy recommendation on the stock with a revised price target of Rs406. At our price target the stock would be trading at 13 X its CY2007 earnings and 7X its CY2007E EBIDTA.
UTI Bank
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs360
Current market price: Rs286
Price target raised to Rs360
At the current market price of Rs286, the stock is trading at 14.4x its FY2007E EPS and 2.5x its FY2007E book value per share. We reiterate our Buy recommendation with a price target of Rs360 with a 12-month perspective, which represents 20% upside from the current market price.