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UBS maintains strong buy on Satyam

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CIOL Bureau
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BANGALORE: UBS Warburg has maintained its 'strong buy' rating for shares of

India's Satyam Computer Services Ltd. after the firm reported strong

third-quarter earnings, its software analyst said on Friday.

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"Satyam's valuation is very attractive and its operating parameters are

improving," UBS Warburg's Sujit Sahgal told Reuters from Bombay.

"Its billing rates, which were generally stagnant in the last few

quarters, have shown an improvement this time," he said.

Satyam's shares on Friday ended nearly three per cent higher at Rs 384,

compared to a 0.23 per cent rise in the Bombay Stock Exchange 30-share index.

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The stock has risen 3.5 per cent since it reported its results on January 8.

In contrast, the benchmark Bombay exchange index has lost two per cent to

4,036.58 points in the same period.

Sahgal said he had a Rs 600 price target for Satyam, on a 12-month period.

"We still think that Satyam is worth investing at this level," he

said.

Satyam Computer, India's fourth-largest software exporter, reported a 142 per

cent surge in its third-quarter net profit on Monday, exceeding analysts'

expectations.

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Sehgal earlier this week cut his stock rating on market favorite Infosys

Technologies Ltd. to "hold " from "buy", citing among other

things, a fall in the firm's billing rates in the third quarter.

UBS has a 'neutral' stock rating on India's software sector.

Satyam's net profit for the October-December quarter rose to Rs 875.09

million ($18.9 million) from Rs 361.87 million a year earlier. Total income rose

87 per cent to Rs 3.33 billion from Rs 1.78 billion.

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Satyam makes software used by the computer systems of over 150 Fortune 1000

companies, including General Electric, Ford Motor Co. and Sony Corp.

($1 = 46.55 India rupees).

(C) Reuters Limited 2001.

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