Patni Computer Systems Limited (PTI) has put together a string of 4 surprises in a row since I last reviewed it in August. The Mumbai, India-based company, which provides IT services and business solutions including business and technology consulting, is still an attractive value stock with a forward P/E of 13.4.

On Oct 31, Patni reported third quarter earnings that surprised by 11.76%. Earnings per share were 38 cents compared to the Zacks Consensus Estimate of 34 cents.

Revenue, however, fell 8.9% to $167.2 million from $183.5 million but the company did see quarter over quarter improvement of 3.3%.

The company is still cautious about the fourth quarter and 2010.

“Deflationary pressure on overall global IT services market is likely to continue for foreseeable future, however the off shoring and global delivery services market share will increase over time,” said Jeya Kumar, CEO.

“We find ourselves in a good position competitively with our micro vertical focused strategy even as sustained visibility to growth is at least 2-3 quarters away,” he added.

The fourth quarter and 2009 Zacks Consensus Estimates are both higher in the last 60 days. The fourth quarter consensus rose 5 cents to 38 cents during that time. The full year is up 12 cents to $1.47 per share, which is 19.38% year over year earnings growth.

Value Fundamentals

Patni Computers Systems is now a Zacks #2 Rank (buy) stock. It has a price-to-book ratio of 1.87 and a PEG ratio of only 0.91. The company has a 1-year return on equity (ROE) of 13.9%.

Zacks Investment Research

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