Fundamentals

MPHASIS

Ticker: 526299 BUY: Rs.872
Target: Rs.1010

Mphasis is an IT services company that serves various sectors and industries such as energy, government, healthcare and hospitality. The company's 80% revenue comes from the US and the remaining comes from Europe, Africa and West Asia. The company has posted decent numbers in Q3FY18 with revenue growing 8.1 per cent YoY. Its PAT has increased by 7.3 per centYoY in Q3FY18. It has started obtaining bigger deals in newer areas since the beginning of H2FY18. In Q3FY18, the company finalised deals worth USD 130 million in its international business. Till the end of Dec 2017, the company had won deals worth USD 435 million, majority of which came from digital, NextGen and governance services. These deals will drive the top-line in the upcoming quarters. Thus, we recommend it as a BUY.

  

GRAPHITE INDIA

Ticker: 509488 BUY: Rs.679
Target: Rs.780

Graphite India is a leading manufacturer of graphite electrode and also operates a carbon paste facility, calcined petroleum coke facility. It has posted robust numbers in Q3FY18 with revenue growing by 176.4 percent YoY to Rs 933 crore due to higher price contracts. EBITDA margin for the quarter stood at 55.6 percent as against 10.8 percent in Q3FY17. PAT grew from Rs 23.3 crore to Rs 340.5 crore YoY driven by robust growth in top-line. Graphite electrodes has healthy demand in domestic and international markets. The recent shut down of furnace capacities in China has raised opportunity for Indian manufacturers to expand and meet the ever-growing demand. 95 percent capacity utilisation has led an uptick in volumes in this quarter. Considering these factors, we recommend it as a BUY.