Oracle Financial Services Software - 1QFY14 numbers were lower than estimates - Kotak

Product revenues fell by 3% YoY on the back of a 42% fall in license revenues. We do note that, the product business is volatile. The new license signings were at $18mn, which were lower than the $22mn in 4QFY13. We understand that, while the macro scene has stabilized in developed markets, clients are still cautious. Our FY14 earnings estimates stand at Rs.142 (Rs.130 earlier). This is largely due to the changed assumption on the rupee. Our price target stands at Rs.2995 (Rs.2610, earlier) based on FY14E earnings. At our TP, the valuations will be similar to those accorded by us to TCS. Looking at the limited upside, we maintain REDUCE. A delayed recovery / sharp deterioration in user economies and a sharper-than-expected rupee appreciation are key risks to our earnings estimates.

Source : Equity Bulls

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