'June qtr results reassuring'

Bhavin Shah, Managing Director, Global Equity Research (Technology Sector), JPMorgan, says the worst may be behind us

The kind of cues in the market from Infy’s results and the outperformance on TCS ... is that justified?
Shah: The June quarter results were reassuring. Perhaps the worst is behind us. In the case of Infosys, we will see resumption of sequential growth from September. With TCS reporting much better results than expected, even if the September quarter is somewhat weak, I think investors will feel comfortable, thinking there could be some strong numbers coming out in December and March. The market probably celebrated the confidence in the idea that we have reached the bottom in sequential performance.

Do you think the rise in the share prices is justified?
Shah: TCS bounced 15 per cent today, reaching about Rs 500. Our June 2010 target price for TCS is Rs 575, and for Infosys, it is Rs 2,100.

Have you changed or reworked your EPS targets on TCS?
Shah: Yes, we have increased our estimates by about 4% for March 2010 to March 2011. We still assume a decline of 6-7% for the September quarter.

By arrangement with UTVi business news