IIFL has downgraded its rating on Satyam Computer Services to sell in its December 17, 2008 investment research report
IIFL has downgraded its rating on Satyam Computer Services to sell with a target price of Rs 140 in its December 17, 2008 research report. "Satyam has cancelled its decision to diversify into infrastructure by acquiring promoter stake in group companies. With Satyam ADR being down 55% and overwhelming concern expressed by investor and analyst community, the decision was quick.
Read: Satyam - Maytas deal - Investors at loss
While cancellation of acquisition is better than the deal going through, irreparable damage has been done for Satyam, as the perception of Satyam’s improved corporate governance over the past few years has taken a big knock. Utilisation of cash resources, future acquisition strategy and returns to shareholders will remain concerns in the minds of investors. We downgrade the stock to SELL, 12-month target price of Rs 140," says IIFL's research report.
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