Mahindra Satyam jumps on JPMorgan upgrade

Mahindra Satyam jumps on JPMorgan upgrade

Mumbai: Shares in outsourcer Mahindra Satyam jumped as much as 9.6% on Thursday after JPMorgan upgraded the stock to overweight from neutral, dealers said.

By 12:43 pm, the share was trading up 6.9% at Rs97.50 after hitting 100, with 7.9 million shares traded, the most on the Bombay Stock Exchange.

JPMorgan set a price target of Rs140 by June next year and said in a note on Wednesday the stock’s sharp price underperformance in the last three months had made risk reward favourable.

“Sharp control on costs and pro-active head count reduction continue to reinforce our belief that Satyam can achieve margins in line with its peer group over the next 12-18 months," analysts Manoj Singla and Nishit Jasani said in the note.

They forecast revenues to grow 18% and 19% in fiscal years 2011 and 2012 respectively, after a 36% decline in fiscal year 2010.

Mahindra Satyam, earlier known as Satyam Computer Services, was acquired by Tech Mahindra in April after the company was hammered by India’s biggest corporate fraud, which came to light in January.