Polaris Software - Stock Investment Research Report

Anand Rathi, stock trading broker and stock investment research firm has recommended to buy stocks of Polaris Software with target price of Rs 250 on Jan. 21, 2010.

Polaris Software looks to be a good mid cap stock. It has reported a good set of 3Q figures, with USD revenue rising 3.9% qoq. They raise FY10-12 earnings estimates slightly. It has won 30 new deals, the highest in a single quarter over the last two years. They reiterate its Buy stocks rating and target price of Rs 250.

Key points from the 3Q results. Polaris Software`s 3QFY10 revenue grew 0.2% qoq (rupee) and 3.9% (USD). Margin was flat qoq. Consolidated net profit rose 13.9% qoq.

The company won 30 new deals, the highest in any quarter in the last two years.
Geographically, Europe was down 1.3% while ROW grew 1.2%.

Market Cap 1,725.04
* EPS (TTM) 13.05
* P/E 13.37
* P/C 10.05
* Book Value 70.21
* Price/Book 2.49
Div(%) 55.00
Div Yield(%) 1.58
Market Lot 1.00
Face Value 5.00
Industry P/E 24.02

Polaris has maintained its EPS guidance for FY10 of Rs. 15/-

The stock investment research house pointed out at target price of Rs 250, the stock would trade at 12 times FY-11e earnings. At this stock valuation, Polaris would trade at a 33% discount to IT large caps.