Oct 19, 2016 05:12 PM IST IST | Source: Moneycontrol.com

Hold Infosys; target of Rs 1075: Axis Direct

Axis Direct recommended hold rating on Infosys with a target price of Rs 1075 in its research report dated October 17, 2016.


Axis Direct's research report on Infosys

Challenging macro and weak BFSI has led to Infosys’ FY17 revenue guidance cut being higher at 250-300 bps (in cc terms) to 8-9%. Revenue target seems achievable given large deals wins in FY16/H1FY17, strong client mining and consistent progress under its new/differentiated offerings of MANA, Panaya, Skava, Design Thinking (DT) etc. However, lack of triggers in FY17 (muted growth in Q3, Q4) would keep the stock range-bound.

Given weak macro and muted demand environment, we expect FY17E/FY18E USD revenue growth of ~8.5%/ 10% (earlier: 9%/ 11%). However, better execution and higher other income leads to no material change in our FY17E/ FY18E EPS at Rs 63/ Rs 72. We believe its differentiated growth strategy on “Renew and New” and accelerated focus on client mining / large deals will play out in the long term. Our TP stands at Rs 1,075 (15x FY18E EPS), implying 5% upside from CMP of Rs 1,027. The stock trades at 16x FY17E / 14x FY18E earnings.

For all recommendations, click here

Disclaimer:
The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.


Sections
Follow us on
Available On