“Healthy margin expansion took place on account of lower-than-expected employee expenses (67.2% as a percentage of revenue vs. 68% expectation) and lower other expenses (down 2.7% QoQ),” analysts at ICICI Securities said in result update.
The board has recommended a maiden dividend of Rs 1.5 per share for the first time and indicated at maintaining a payout ratio of around 35- 40% of PAT (including DDT), going ahead.
“This, accompanied by an improved margin trajectory for FY19E, could lead to earnings growth of around 14% CAGR in FY18-20E. With a healthy dividend payout and becoming net long term debt free by October, 2018, we believe FSL could witness a re-rating, going ahead,” ICICI Securities said and maintained ‘buy’ rating on the stock with a revised target price of Rs 87 per share.
“For FY18, revenue growth was 2.8% in CC terms (normalized for domestic business divestment at around 7% in CC terms). We believe that the current business traction does not give comfort on significant improved revenue growth momentum. Thus, we largely retain our earnings estimates and assign a HOLD with target price of Rs 60,” analysts at Emkay Global Financial Services said in result update.
At 03:16 pm; the stock was trading 10% higher at Rs 70.95 on the BSE on back of five-fold jumped in trading volumes. A combined 47.35 million shares changed hands on the counter on the BSE and NSE so far.