Satyam gained 8.2 percent to 421.05 rupees at the close of trading on the Bombay Stock Exchange today. Bigger rival Infosys Technologies Ltd., the worst performer on India's Sensitive Index in 2007, gained 5.8 percent. Tata Consultancy Services Ltd., India's largest manager of computer networks and call centers, rose 6.2 percent.
``Valuations have become mouthwatering,'' Apurva Shah, head of research at Prabhudas Lilladher Pvt. in Mumbai, said in an interview today. ``Six-month, 12-month, three-month, one-month: every single time period, tech had been underperforming.''
Satyam is trading at 16.6 times its estimated earnings for the year starting April 1, according to Bloomberg data. That compares with a price-to-earnings ratio, one measure of how expensive a stock is, of 22 in March 2007.
``That's the lowest I have seen it in so many years of tech coverage,'' Shah said. He recommends investors buy Satyam shares.
The price-to-earnings ratio for Infosys, India's second- largest computer-services provider, is 20, compared with 29 at the beginning of the current financial year. Mumbai-based Tata Consultancy's is 18, down from 29 in March 2007.
Wipro Ltd., India's third-largest software-services exporter, gained 5.8 percent today on the Mumbai exchange, and is trading at 20 times estimated earnings, lower than March's 27.
``People just have to get snapped out of their slumber,'' Shah said. He rates Infosys, Tata Consultancy and Wipro as ``market-perform.''
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