Analysts' corner

Infosys Technologies
Reco price: Rs 2,795
, Target price: Rs 3,160

Infosys Technologies' results for the first quarter of the financial year 2010-11 (Q1FY11) were below the Street's expectations with a 5.2 per cent quarter-on-quarter (q-o-q) decline in net income. Moreover, the upward revision in the guidance also failed to meet expectations with the management taking a cautious stance due to global uncertainties. In Q1FY11, the consolidated revenues of Infosys grew 4.3 per cent sequentially. In constant currency, the revenues grew six per cent sequentially, driven by the volume growth (up 7.6 per cent), which was much ahead of Street's expectations. The operating profit margin declined 236 basis points sequentially to 31.7 per cent, mainly on account of a wage hike, negative cross-currency impact and marginal rupee appreciation. The stock is trading at 22.8x its FY11 and 19.5x its FY12 earnings estimates. Maintain hold.

— Sharekhan