Oracle shares: Oracle Financial Services soars 27%, analysts still optimistic

Mumbai: Shares of software company Oracle Financial Services Software (OFSS) soared over 27% on Thursday to all-time highs as traders mounted bullish derivative bets after the company’s third-quarter results beat expectations. Though the stock may be overbought, analysts remain optimistic about the company’s prospects of record deal wins in a global economic environment that has been challenging for most Indian software companies

Oracle shares touched their all-time high of ₹6,622 during the day’s trade before closing at ₹6,479.

“In the past two quarters, OFSS has won record deals in the cloud and Saas space which has led to price target revisions and increase in its multiples,” said Rahul Jain, vice president – research at Dolat Capital Market. The brokerage, which has a price target of ₹6,260 on the stock, maintains a ‘buy’ rating. According to Dolat, OFSS signed a new licence worth $49.5 million as it added 21 new deal wins across products and the commentary on deal wins and pipeline suggested continued business strength.

The company’s December quarter consolidated net profit was up 76.2% to ₹757.5 crore from the previous quarter. Its consolidated revenue from operations was up 26.25% at ₹1,823.6 crore. Consolidated net profit and revenues were up 50.5% and 25.8% respectively from a year ago. Jain warns of a growth moderation in January-March. “We see a correction in revenues of the fourth quarter since Q2 and Q3 were exorbitantly strong,” he said.