Prabhudas Lilladher has given Buy recommendation for Mphasis with a target price of Rs. 1869 in its research report issued on Apr 27, 2021
Prabhudas Lilladher’s research report on Mphasis
Mphasis on 26th April 2021 announced that Blackstone entered into a definitive agreement to transfer 55% shareholding in Mphasis from its existing PE fund (Marble II PTE) to a different Blackstone PE fund (BCP Topco IX Pte). Blackstone also brought along marquee long term co-investors – Abu Dhabi Investment Authority (ADIA) and UC Investments. The same agreement will trigger a mandatory open offer; which Blackstone intends to subscribe at Rs 1677 per share (-1% discount to 23rd April close). Given Blackstone’s decision to remain invested and that the new investment has horizon of 7 to 10 years, removes a major overhang of promoter’s exit threat which will be comforting to minority shareholders.
We continue to value Mpahsis on 21X earnings multiple on Mar-23 EPS of INR 89 to arrive at a TP of INR 1869. Mpahsis is currently trading at multiples of 21.3/19.4X on EPS of 81.1/89 on FY22/23 respectively. Maintain Buy.