Dolat Capital's research report on Oracle Financial Services Software
Technology trends in the financial services industry: Management believes that the banking industry in the next decade will enter a new phase of hyper-scale connectivity. This connectivity will go far beyond today’s mobile revolution and will involve complex networks and ecosystems of banks, firms, devices, and humans. Along with this the Cloud adoption is also gaining popularity in the financial services industry as it is helping in both reductions in costs and tool to drive growth of the business. The Application Programming Interface economy offers banks the opportunity to commercialize resources like data, services and other capabilities to directly create business value. As the API economy continues to evolve, Open Banking capabilities will increasingly become table stakes for banks. OFSS has about 1600 API interfaces with its product offerings. These capabilities will enable them to sell and deliver improved products, services, and experiences, access existing and new customers, tap new markets and drive revenue growth.
Outlook
Encouraged by the large prospects of Core modernization theme, relative stability in BFS spends and its high FCF yields of 6%, we continue to maintain our Buy rating on the stock with a DCF based TP of Rs 3,500 per share (implies 19x on FY22E PER basis).
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