Share to buy: Want to earn 39% return on your investment? Buy this stock, say experts
The IT counter is strong from both fundamental and technical perspective. The counter is poised with an upside potential of near 39 per cent .
Stock market investment tips: Amid blood bath taking place at the Dalal Street, Indian equity experts have started advising sector specific stocks with strong fundamentals. Since IT stocks have done reasonably well and IT mid-cap stocks are fuelling IT major's rally at Indian indices, experts have suggested Sonata Software to the Indian investors to think off before taking any investment decision. They say that the fundamentals of the stocks are poised with an upside potential of near 39per cent for mid-term and long-term perspective.
Speaking on the fundamentals of the Sonata software as a counter Amit Chandra and Apurva Prasad, Analyst at HDFC Securities informed Zee Business online in a detailed research report, "Sonata delivered a good quarter, international IT services (IITS) revenue was up 4.3% QoQ (+5.0% CC) to $40.8mn, in-line with our est of $40.3mn. Growth was led by IP-led revenue (+10.7% QoQ) and continued traction in Top-5 accounts (+10.5% in 9MFY19). IITS margin expanded 779bps QoQ to 28.4% (highest ever) led by cut in high cost sub-con expenses, higher utilisation and operational efficiency. The sustainable margin range for IITS is 23-24% (9MFY19 23.8%). Total revenue stood at Rs 8.44bn, +42.3/10.1% QoQ/YoY, led by growth in Domestic Product & Services’ +(DPS) revenue (Rs 5.63bn, +72.8/6.2% QoQ/YoY)." The research analyst duo maintained that an investor can take a buy position in the stock for the target of Rs 466/stock. Currently, the counter is oscillating at Rs 334/counter levels."
Speaking on the outlook of the IT counter Simi Bhaumik, a SEBI registered technical equity analyst told, "Sonata Software is an IT major and IT sector is doing well. In fact, the small and mid-cap IT stocks have helped IT majors to continue their rally even when the markets are in range bound condition." Bhaumik went on to add that the IT counter is strong in both mid-term and long-term perspective.
"An investor can buy the stock taking stop loss at Rs 310/stock levels for the immediate target of Rs 350-360/share mark. Once, it breaches this resistance, it would soon touch Rs 370-380/share levels," concluded Simi Bhaumik.