Emkay, a leading player in equities and portfolio management services, expects a more than 61 percent upside potential in Sterlite Technologies in the next 12 months from its current market price of around Rs 155. The brokerage has a 'buy' rating on the stock at a target price of Rs 250 per share.

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Sterlite Tech shares have gained almost 5 percent in the last two days although the midcap stock has corrected by over 48 percent in the last one year.

Shares of Sterlite were trading 0.40 percent higher at Rs 162.15 per share at 10.06 am on Friday. The stock opened at Rs 160.40, lower from its Thursday's close of Rs 161.45. It touched an intra-day high of Rs 164.60 and an intra-day low of Rs 159.25 so far today.

SOTL recently announced that it has acquired Impact Data Solutions (IDS), a UK-based data centre network infrastructure design and deployment specialist firm.

The all-cash deal acquisition was funded by a combination of internal accruals and foreign currency debt instruments at an enterprise value of GBP 12 million, according to Emkay's research report.

Under the overall deal structure, SOTL will acquire a 100 percent stake in IDS and its affiliate, of which 80 percent has been acquired and the remaining 20 percent will be acquired on the basis of an earn-out model over the next few years, the report added.

The IDS acquisition will help SOTL strengthen its foothold in European markets as it will gain access to three of the top four global cloud providers, helping it offer integrated data centre connectivity solutions, it added.

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"We view this as more of a capability acquisition due to its small scale and not a revenue acquisition. So it will not have a significant impact on profitability in the current fiscal. IDS's revenue stood at GBP8mn for CY18 with an EBITDA margin of ~20%. CY19 revenue is expected to be ~GBP10-12mn. We maintain Buy rating on SOTL with a TP of Rs250 based on 7.4x EV/EBITDA FY21E," Emkay analyst Anubhav Gupta stated in the report.

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Meanwhile, the broader NSE Nifty50 was down by over 38.50 points, or 0.33 percent, to trade at 11,532.70. The benchmark 30-share S&P BSE Sensex was down by 83 points, or 0.21 percent, to trade at 38,907.

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