NEW YORK ( TheStreet) -- Patni Computer Systems (NYSE: PTI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.3%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • PTI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 36.20% is the gross profit margin for PATNI COMPUTER SYSTEMS which we consider to be strong. Regardless of PTI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.90% trails the industry average.
  • PATNI COMPUTER SYSTEMS's earnings per share declined by 40.5% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PATNI COMPUTER SYSTEMS increased its bottom line by earning $1.98 versus $1.84 in the prior year.

Patni Computer Systems Limited, an information technology (IT) services company, provides a range of IT services through integrated onsite and offshore delivery locations. The company has a P/E ratio of 9.1, below the average computer software & services industry P/E ratio of 25.3 and below the S&P 500 P/E ratio of 17.7. Patni Computer Systems has a market cap of $1.16 billion and is part of the technology sector and computer software & services industry. Shares are down 19.4% year to date as of the close of trading on Monday.

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