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Dolat Capital Report
Brokerage firm Dolat Capital has initiated coverage on R Systems International Ltd. with a ‘Buy' rating, and has set a target price of Rs 410, implying an upside potential of about 71% from current levels, citing strong growth visibility, improving execution capabilities, and attractive valuations.
According to the brokerage a sustained outsourcing momentum pick-up by mid-market enterprises, continues to remain a sweet spot for R Systems to drive high-quality outcomes.
The rising adoption of AI-led development and platform modernisation further expands wallet share opportunities.
R Systems' full-stack capabilities across cloud, data, and AI, combined with its product mindset, position it well to capture this shift and deepen client engagement.
Recent market correction has meaningfully eased valuations, providing an attractive opportunity as stock now trades at sub 12 times of its CY27 earnings.
Noting company strengths and favorable valuations, Dolat Capital estimates CY27E EPS of Rs 20.6 and assign a multiple of 20x (implies 1x PEG basis) to arrive at target price of Rs.410. Initiates coverage with a ‘Buy' rating on the stock.
However, the brokerage cautioned about risks including macro-driven slowdown in IT spending, high dependence on North America, and execution challenges related to acquisitions, though it believes the company is well positioned to navigate these headwinds.
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