The ambition of breaking into the so-called ”Tier-1 Indian heritage IT services” has made Tech Mahindra bid aggressively for Satyam at Rs58 per share to emerge as the highest bidder.
As numbers for Satyam are not available, we did a scenario analysis for accretion/dilution of the acquisition, and our base case throws up EPS dilution of around 21% for FY10.
Our extant estimates for Tech Mahindra (without the acquisition) already factor in 20% y-o-y EPS degrowth.
We maintain our fundamental SELL on the stock and reverse our tactical long position.
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