You are here: Home » Markets » News
Business Standard

Top brokerages remain bullish on Infosys

IndiaNivesh Sec has a 'buy' call, IDFC Sec has an 'outperformer' rating and Motilal Oswal Sec has a 'buy' rating on the stock

SI Reporter  |  Mumbai 

The second quarter earnings were above our estimates on revenue and EBITDA front. However, the net profit was marginally down due to one time charge of Rs 219 crore for provision related matters. The substantial increase in rupee revenue growth guidance was primarily due to change in depreciation of the Indian rupee against the US dollar from Rs 59.01 to Rs 62.01, IndiaNivesh Securities said in a note.

"At current market price of Rs 3,297, the stock is trading at 18.4 times FY14E and 15.2 times FY15E EPS estimate. However, valuations will look more attractive after 5% rise in earnings. Further, the gap between TCS and Infosys should narrow going forward after its delivers consistent and in-line industry performance. We revise our target price upward to Rs 3,630 and continue to maintain 'BUY' on the stock." said Daljeet Kohli-Head of Research, IndiaNivesh Securities Pvt Ltd.

The guidance for FY14 implies negative 1% CQGR growth for remaining two quarters at higher end - still builds enough caution despite strong quarter and improving demand outlook, IDFC Securities said in a note.

"We expect the stock to trade up and settle in Rs 3,200-3,500 till next set of good comes in. We expect the stock to move sideways after today's initial upmove. Maintain 'Outperformer' rating on Infosys," says Hitesh Desai, Director, Equity Research at IDFC Securities.

Infosys' second quarter dollar revenu growth of 3.8% q-on-q at $2066 was led by volume growth of 2.6% q-o-q and price realisation gain of 1.6% surprised positively. However, flattish EBIT margin at 23.6% was due to higher sales & support staf costs and trainee costs, Motilal Oswal Securites said in note.

"Infosys US dollar revenue growth guidance of 9-10% year-on-year, was marginal short of our expectation. Our current estimate of dollar revenue growth for FY14 is 11% and EPS estimate is Rs 186.5. We maintain 'BUY' on the stock," said Rikesh Parikh, VP, Motilal Oswal Securities.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, October 11 2013. 12:56 IST