Broking house, Brics PCG is bullish on MTIL. It has recommended buy rating on the stock with a target price of Rs 407.

Tie-up with Active Solutions, Nepal

"Further to its plans to expand its geographical reach, Micro Technologies has entered into a tie-up with Nepal-based Active Solutions to launch its security products in this country. After test marketing MTIL's range of security products, Active Solutions has begun to introduce Micro HSS, VBB and LMTS to its customers in Nepal."

"MTIL has already received approval from the Transport and Telecom Department of Nepal for the implementation of its products throughout the country. Though the size of the order book is not yet known, we expect good demand from this geography."

Strategy to expand reach paying off

"We believe that the steps taken by MTIL to expand its reach are very positive. The company recently formed an association with Girvan Institute of Technology, USA to take its security products to the North American market. MTIL already has good demand from the Middle East and some European countries. An expanded geographic presence would further augment its order book."

Valuation

"At the current price of Rs 187, the stock is trading at 7.3x and 4.7x its FY07E and FY08E earnings of Rs 25.7 and Rs 39.7 respectively. We believe that the current valuations of the company are undemanding and should improve as it registers growth in the coming quarters. We recommend a Buy with a target price of Rs 407."