Shares of Satyam Computer are likely to continue with its free fall in the morning trade on the bourses on Friday, analysts said.
Shares of Satyam Computer are likely to continue with its free fall in the morning trade on the bourses on Friday, analysts said, adding the scrip may also taste the sub-Rs 20 levels, analysts say.
"The stock is likely to get battered further as most of the leading brokerage houses have reiterated their earlier stance on the company with 'sell' recommendation. Some even withdrawing their coverage," Religare Hichens, Harrison said in its research report.
"Under the given circumstances, we believe that the company's financials cannot be relied upon to make investment recommendations. We are withdrawing coverage on Satyam," brokerage firm Motilal Oswal said in its report.
Marketmen said the fundamentals of the company have been shaken completely and the malpractices in the financial disclosures has shattered investor confidence.
"Book value post recent disclosure could be potentially negative. Do not rule out stock falling to sub Rs 20 levels," brokerage firm Emkay Research said in its report on Satyam.
"There is no fundamental in the company. The movements in the scrip will be more of a technical in nature and investors should wait for more clarity," said SMC Global vice-president Rajesh Jain said.
Marketmen said the company's management are confused about the current situation the firm is in which was reflected in the speech of Satyam's interim CEO R Mayampati.
"Considering the fact neither revenues nor profits are reliable facts of the company we are discontinuing our fundamental target price on the company. In short term we will see lot of Satyams clients migrating to competition like Infosys, TCS and Wipro," Religare added.
Meanwhile, a host of domestic and foreign brokerage firms, including Credit Suisse, Religare and Angel Broking, on Thursday suspended their coverage of Satyam Computer shares.
Most of the brokerage firms, in their research notes, stated that they were suspending the rating and target price on Satyam as the company's true book value is not known, while the revenues and profits are also not reliable.
"At this stage it is very hard to predict as to what level the stock can nosedive. It is hard to tell as to what is left on the books but the stock is going to remain under pressure," Sharekhan head research Gaurav Dua said.
Satyam Computer scrip had nosedived 78 per cent to Rs 39.95 on Wednesday after its founder and chairman B Ramalinga Raju confessed of an about Rs 7,800 crore fraud in the company.
The company's American Depository Receipts had taken a 91 per cent beating on Wednesday, in its pre-market trading, and fell to USD 0.85.
The ADR dip in pre-market trading prompted the New York Stock Exchange to halt trading in Satyam Computer at its bourses.
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