Infosys likely to be in Rs 1,500-1,800 zone

CNBC-TV18’s Managing Editor, Udayan Mukherjee –The American Depository Receipt (ADR) of Infosys was down 13% so that makes one worry about the stock this morning. The market clearly is not looking at the rupee Earnings Per Share (EPS) guidance; it’s focused on the large client, BT had a bit of a shocker this quarter and the market is justifiably worried on that’s core. Has that made Infosys ultra conservative about the second half? Probably it has.

Do remember that a whole part or a large part of the guidance is back ended for Infosys so there have to be worries. But given the kind of Rs 101 EPS that they held out the stock is already close to Rs 1,650-1,670; that is about just above 16 times current year’s earnings for a company which will deliver more than 20% earnings growth. It’s difficult to say an outright sell on Infosys on these kinds of levels. Will it drift down in the near-term? Sure it could.

So on Infosys day it looks like the stock might be Rs 1,700-2,000 kind of range. I think now after looking at the numbers closely it probably will be in Rs 1,500-1,800 zone for the moment. So it appears sideways in Infosys for the moment. Huge amount of downside on valuations cannot be justified just yet; I do not think they did or they seemed as much as on Friday as the market made it out to be. But will it outperform hugely or bounce back to Rs 2,000? That seems a bit difficult as well for the near-term.