Broker's call: Oracle Financial (Buy)

| Updated on September 30, 2019 Published on October 01, 2019


Oracle Financial (Buy)

CMP: ₹3,146

Target: ₹3,910

Our analysis indicates the recent amendments in the Indian corporate tax rates could lower the effective tax rate (ETR) for Oracle Financial Services Software (OFSS) by at least 7 ppt.

Factoring the revised rates and the latest rupee/dollar exchange rate assumptions, our FY20/FY21 EPS estimates are up by 10 per cent/13 per cent. Surprisingly, the stock’s reaction has been muted (<2 per cent change since the announcement), in contrast to the rally in the broader market (+7 per cent for Nifty50) on the tax rate reset.

We see this as an opportunity to play the recovery in license sales ($49.4 million bookings over 4QFY19-1QFY20) + an attractive 6 per cent dividend yield. BUY.

Published on October 01, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.