Citi: Upgrades Satyam to Buy

Citigroup has upgraded its rating on Satyam Computer Services to Buy with a target of Rs 510.

The report said: "We are upgrading Satyam to Buy / Medium Risk (1M) from Hold / Medium Risk (2M) on the back of strong quarterly performance, good top-line momentum and reasonable valuations. Satyam has underperformed sector leader Infosys by 14% and peer HCL Tech by 8% since the start of October.

"Satyam now trades at over a 32% discount to Infosys – which is close to a one-year high. We have upgraded our earnings estimates by 6-7% respectively, and we raise our target price to Rs510 from Rs475 (maintaining our target multiple of 21x FY08E EPS)."

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