Goldman Sachs starts Satyam Computer Services Ltd,Tech Mahindra with ‘buy’ ratings

Tech Mahindra Ltd shares gain 3.4 percent and Satyam Computer Services Ltd rises 1.8 percent after Goldman Sachs initiates coverage of both companies with “buy” ratings.

Goldman says the planned merger between the two companies would create the fifth largest Indian IT offshoring company by revenue,offering “adequate scale to target potential big-ticket deals.”

The investment bank adds a merged Tech Mahindra-Satyam company would see good revenue growth and better expense management,while providing higher cash returns to investors.