UBS cuts price targets of Infy, Satyam, Wipro

MUMBAI: UBS Warburg has lowered the price targets of three leading Indian

software companies - Infosys Technologies, Satyam Computer Services and Wipro

Ltd. saying their growth is likely to be impacted by a US slowdown.

In a research report dated March 19, the brokerage house said it has cut its

12-month price target for Infosys to Rs 5,750 from Rs 7,200.

UBS said the report was prepared after a meeting with top Infosys officials.

"We reiterate our hold recommendation," the report said.

It said Infosys is expecting lower sales growth of 40-50 per cent for the

year ending March 2002 on the back of a troubled environment in the US.

"We believe the company's growth might be muted because of its exposure

to telecom equipment," the report said.

The report said although Indian industry has been relatively immune to

problems in the US due to its business model, there is a material part of

revenue at risk.

It said 30 per cent of Infosys' revenues were estimated to be

revenue-enhancing kind which the brokerage house said are under risk of facing

scalp by IT spenders.

UBS said it has cut its 12-month price target for Wipro Ltd., India's most

valuable software firm, to Rs 2,000 from Rs 3,000.

"We are cutting our estimates, paring down our growth rates for the

company," the report said. "We reiterate our hold rating on the stock

implying relatively higher valuations as compared to the sector."

It also cut its 12-month price target on Satyam Computer Services to Rs 350

from Rs 550.

"We are cutting (our) estimates and price target and reiterating

buy," the report said.

The brokerage house said Satyam has a larger exposure to the insurance sector

and it has not faced any problem as yet.

(C) Reuters Limited 2001.