Buy This Technology Stock For 23% Return In 1 Year: Emkay Global Suggests

Brokerage firm Emkay Global suggests investors to buy the stock of Mphasis for a 23.6% return. The company is expecting stable EBITM with an upward bias over the medium term, considering benefits accruing from revenue growth-led operating leverage.

Target Price

The Current Market Price (CMP) of Mphasis is Rs. 2952. Emkay Global has estimated a Target Price for the stock at Rs. 3650. The stock is expected to offer a 23.6% upside, in 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 2952
Target Price	Rs. 3650
1 year return	23.60%

Company performance

The company's Revenue in FY 21 stood at Rs. 97,222 crore, which is expected to grow at Rs. 119,317 crore in FY 22. Their EBITDA in FY 21 was Rs. 18,027 crore, which is anticipated to be at Rs. 21,219 crore in FY 22. Mphasis reported Adj. Profit after tax at Rs. 12,166 crore in FY 21, it is expected to grow at Rs. 14,163 crore in FY 22. The company's Hi-tech vertical is seeing strong traction across medical devices and instrumentation, ISVs and consumer electronics sub-segments. It plans to emulate the success of Hi-tech in the Healthcare vertical (1-2 anchor clients currently).

Comments by Emkay Global

Emkay Global commented, "We retain Buy on Mphasis on continued strength in the Direct business with stable margins. Overall revenue growth should converge with the Direct business as the share of the DXC business shrinks further. Mphasis remains fairly confident of sustaining growth momentum on the back of broad-based demand with Europe & multiple verticals (TMT, Logistics & Transportation) aiding growth besides anchor vertical (BFS) and geography (US), robust deal intake and pipeline, and continued wallet share gains with key clients."

About the company

Mphasis applies next-generation technology to help enterprises transform businesses globally. The company's Front2Back^TM transformation approach uses the exponential power of the cloud and cognitive to provide a hyper-personalized digital experience to clients and their end customers Mphasis' core reference architectures and tools, speed, and innovation with domain expertise and specialization are key to building strong relationships with marquee clients. The logistics and transportation vertical of Mphasis are seeing good traction in the areas of the supply chain, airlines, and railroad.

(Also read: Buy This Motor Stock For 14% Upside, In Near-term: Axis Securities)

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.