Buy Allied Digital Services Ltd. (ADSL)

Target Price : Rs. 530 in 1 year

Allied Digital Services Ltd (ADSL) is a leading player in remote infrastructure management services (RIMS). According to a McKinsey-Nasscom report, the outsourcing of IMS to India is expected to grow at a CAGR of over 30% to USD13-15 billion by 2013. ADSL acquired an 80.5% stake in US-based En Pointe Global Solution Ltd (EGSL) at an equity valuation of ~USD24 million (total equity valuation ~USD30 million) in July 2008. The acquisition has expanded ADSLs reach into the US market as well as provided access to EGSLs several Fortune 1,000 clients. Due to its unique positioning, ADSL shall ride the high growth in the RIMS and solution market. This coupled with the sustainability of its margins will help it to grow its earnings at a CAGR of 19.6% (on adjusted earnings basis) over FY2009-11. Considering its 19.6% earnings CAGR and healthy return ratios, ADSL seems to be trading at attractive valuations of 7x FY2010 earnings estimate and 5.9x FY2011 earnings estimate.

This analysis is based on Sharekhan and India Infoline research reports. Both came out with a buy recommendation. Hence this week itself, this scrip may shoot up. Long term investors may accumulate when ever there is a correction.

0 comments:

Disclaimer & Privacy Policies

(c) Mrs. Ruby Christy. This site and contents are owned by Mrs. Ruby Christy;
Use of this website and/or services offered by us indicates your acceptance of our Disclaimer& Privacy Policies.
Information and opinions provided on this website (www.investchips.com) has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. Investchips.com and its affiliates, information providers or content providers and R.John Christy and his Family shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this website or feeds, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. Investchips.com,its affiliates, information providers ,content providers and R. John Christy and his Family shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this website. Any action you choose to take in the markets is totally your own responsibility. Investchips.com and R. John Christy and his Family will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. Opinions expressed by R. John Christy are his own and not of his past, present and future employers.
The DoubleClick DART cookie is used by Google in the ads served on this websites displaying AdSense for content ads. When users visit this website and either view or click on an ad, a cookie may be dropped on that end user's browser.

Google, as a third party vendor, uses cookies to serve ads on this site.
Google's use of the DART cookie enables it to serve ads to your users based on their visit to this site and other sites on the Internet.
Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.
www.investchips.com never collects any personal information of visitors.

WWW.INVESTCHIPS.COM