Investment bank Merrill Lynch estimates that Sasken’s revenues will be affected in the next two fiscals due to the bankruptcy filed by its client Notel. Nortel till recently contributed about 10 percent to Sasken’s revenues.

“Our estimate of downside risk of 20%-30% to FY10 and FY11 estimates factors in loss of at least part revenue from Nortel. Additionally, there could be a one-time writeoff of bad debts,” said Merrill Lynch. It further downgraded its price target on Sasken from Rs 120 to Rs 50.

“Chap 11 filing by Nortel, one of the leading OEM players, suggests recovery could take much longer than anticipated, indicating further downside risk to estimates," added the report.