Buy This Bluechip Stock For Sharp 23.6% Short Term Return, Top Brokerage Suggests

Top brokerage firm Emkay Global has suggested investors to buy the stock of Mphasis, for a sharp 23.6% short term return.

Stock To Buy: Target Price & Financial Result

The Current Market Price (CMP) of Mphasis is Rs. 2265. Emkay Global has estimated a Target Price for the stock at Rs. 2800. This stock has the potential to give a 23.60% return, in the upcoming 1 year. It is a large-cap stock with a market capitalization of around Rs. 41,597 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 2265
Target Price	Rs. 2800
Potential 1 year return	23.60%
52 week high share price	Rs. 3,659.75
52 week low share price	Rs. 2,070.50

The company's revenue in FY22 was recorded at Rs. 119,616 mn, which is expected to be at Rs. 142,285 mn in FY23. Their EBITDA in FY22 stood at Rs. 21,177 mn, which is expected to be at Rs. 25,479 mn in FY23. The company's adj. PAT in FY22 was recorded at Rs. 14,310 mn, which is expected to be at Rs. 17,030 mn in FY23. The company expects Q2 growth to be better than Q1.

Why Should Investors Buy This Stock: Emkay Global

After interacting with Mr. Manish Dugar, CFO, on the demand environment, revenue growth, and margin outlook, Emkay Global stated, "The company highlighted pockets of weakness - mortgage, deferment in spending on horizon-3 initiatives, and furloughs announced by few clients - which may weigh on near-term growth. Mphasis remains confident of delivering EBITM within the guided range of 15.25-17% for FY23, considering the benefits accruing from employee pyramid correction, higher utilization, off-shoring, pricing benefits, and lower ESOPs and amortization charges, which should offset headwinds emanating from wage hikes, backfilling costs, planned investments in capability augmentation, and geographic expansion."

"Weakness in mortgage business and furloughs in few accounts are likely to weigh on near-term revenue growth. We retain Buy with a Target Price of Rs. 2,800 at 25x June' 24E EPS, given continued wallet share gains and steady expansion in addressable markets with competency build-up," the brokerage firm added.

Company Portfolio: Mphasis

Mphasis applies next-generation technology to help enterprises transform businesses globally. Customer centricity is foundational to Mphasis and is reflected in the Mphasis' Front2Back Transformation approach that uses the exponential power of cloud and cognitive to provide hyper-personalized digital experience to clients and their end customers. Mphasis' core reference architectures and tools, speed and innovation with domain expertise.

Now, the company is focusing on proactive large deal origination, steady expansion in competencies, client mining, new logo additions, and steady increase in deal sizes and tenure led to healthy deal TCV wins and revenue conversion.

Disclaimer

The above stock was picked from the brokerage report of Emkay Global. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.