Prabhudas Lilladher - Prithvi Information

According to bokerage house, Prithvi Information Solutions has posted a very strong performance in Q2 FY07: robust revenue growth of 21.5% qoq (and 68.2% yoy), coupled with 320-bp qoq improvement in the EBITDA margin, led to a 20.1% qoq (and 85.6% yoy) growth in net profit, to Rs 222m.

It is finalising plans for an overseas acquisition, for which it is considering raising about $50m to $70m through an FCCB issue.

They further added, At the CMP of Rs 391, the stock trades at 8.3x FY07 estimates and 5.3x those of FY08. These seem undervalued from a 12-month perspective. Hence they re-iterate our buy rating, with a target price of Rs 525.

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