Angel Broking has maintained buy rating on 3i Infotech , with target price of Rs 210 implying 12 month prespective in its February 05, 2008 report. "3i Infotech posted a strong 14% qoq growth in Operating Revenues in 3QFY2008, which hit Rs317cr. On a yoy basis too, the company registered a robust growth of 85%. Organic initiatives of the company contributed 8% to overall growth during the quarter, and the balance came from the company’s inorganic pursuits. In 3QFY2008, the company’s Products Business clocked an impressive 27% and 80% qoq and yoy growth respectively. The Services Business clocked a subdued 3% qoq growth, even as it posted a strong 91% growth on a yoy basis. In the Products business, the BFSI Segment grew by a strong 16% qoq, while the ERP Products business grew by a substantial 127% qoq. On a yoy basis, the BFSI Segment grew 88%, while ERP grew by nearly 50%. In 3QFY2008, 3i completed the acquisition of J&B Software Inc. and its subsidiaries. With this, the company now has a strong presence in payment processing solutions. The company also acquired a majority stake in Linear Financial & Management Systems, which is a Delhi-based BPO transaction services company. Notably, the company’s performance suffered minimal impact due to the Rupee appreciation given it’s geographically spread diverse operations. Going ahead, we expect 3i Infotech to maintain a CAGR growth of 45.9% in Topline over FY2007-10E, while Bottomline is expected to grow at a CAGR of 43.2% in the mentioned period. We expect EBITDA Margins to touch 24% levels by FY2010 vis-à-vis 24.2% in FY2007. At the CMP, the stock is trading at 8.0x FY2010E EPS. We believe that these valuations are fairly attractive, given the strong growth expected going forward, apart from a relative insulation to the Rupee-Dollar movements, given its widely dispersed geographical spread of revenues (around 5% of revenues is net exposure to the US Dollar). We maintain a Buy on the stock, with a revised 12-month Target Price of Rs 210," says Angel Broking report.
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