Recommendations From Computers - Software & Cables - Telephone Sectors
The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.
BIRLASOFT LTD.
CMP - Rs 193.35
BSE CODE : 532400
Volume : 79,716
Face Value : Rs 2
Target : Rs 210
Stoploss : Rs 180(CLS)
Birlasoft Ltd. is a digital and information technology (IT) services company providing software development and IT consulting services. Its service categories include digital, enterprise technologies and services and application and infrastructure. On the consolidated financial front, for Q2FY21 its net sales increased by 10.87 per cent to Rs 857.46 crore from Rs 773.42 crore posted in Q2FY20. Operating profit rose by 42.46 per cent to Rs 125.89 crore compared to Rs 88.37 reported in Q2FY20. For Q2FY21, the company reported a net profit of Rs 69.12 crore which is an increase by 69.31 per cent from the net profit of Rs 40.83 crore reported in Q2FY20. Going forward, the company expects its revenues to further improve led by clawback of discounts and large deals wins along with traction in the digital industry. Hence, we recommend a BUY.
STERLITE TECHNOLOGIES LTD.
CMP - Rs 160.40
BSE CODE : 532374
Volume : 42,481
Face Value : Rs 2
Target : Rs 175
Stoploss : Rs 149 (CLS)
STL is a leading integrator of digital networks. Looking at the quarterly trends, on a consolidated basis, the net sales for Q2FY21 decreased by 14.72 per cent to Rs 1,159.53 crore from Rs 1,359.69 crore reported for Q2FY20. It reported an operating profit of Rs 211.77 crore for Q2FY21, thus contracting by 28.85 per cent compared to the operating profit of Rs 297.65 crore posted for Q2FY20. The company gained a net profit of Rs 53.54 crore in Q2FY21, which is a contraction by 66.06 per cent compared to the net profit of Rs 157.77 crore gained in Q2FY20. It is partnering with Bharti Airtel to build a modern optical network in 10 circles, which shall form the foundation for many next-gen services. The company has won a digital transformation order for a leading telecom operator in Africa. It will also offer Opticonn solution for a leading telecom player in Europe. Hence, BUY.
(Closing price as of Dec 01, 2020)