Monday, April 16, 2012

Maintain ‘reduce’ rating on Infosys – TP Rs.2500


1. Company’s 4QFY12 USD revenue declined 1.9% qoq, as against guidance of 0-0- 0.02% increase.

2. EBIT missed market estimates buy EPS was in line with expectations due to higher other income.

3. The guidance for FY13 of USD revenue growth of 8-10% and EPS estimate of Rs.159 – Rs.161 looks 
poor.

4. Estimates and rating on the scrip are under review due to weak outlook.

5. Guidance for FY13 is with the anticipation of 0-1% qoq revenue growth in 1Q and 4-5% qoq revenue 
growth in 2Q –Q4.

6. Poor EPS outlook for FY13 does not factor in any wage hike and it is due to worries regarding poor 
demand, which is an industry- wise worry.

7. Retain ‘reduce’ rating on the stock with the earlier target price of Rs.2500 over one year.

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