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Accumulate Infosys; target Rs 1443: P Lilladher
Prabhudas Lilladher has recommended an accumulate rating on Infosys Technologies with price target of Rs 1443. Infosys reported Q2FY09 numbers, handsomely beating street expectations. There was a strong growth in the consolidated revenues at 11.6% QoQ in rupee terms to Rs 54.18 billion.
Prabhudas Lilladher has recommended an accumulate rating on Infosys Technologies with price target of Rs 1443, in its report dated October 10, 2008.
"Infosys reported Q2FY09 numbers, handsomely beating street expectations. There was a strong growth in the consolidated revenues at 11.6% QoQ in rupee terms to Rs 54.18 billion, which was driven by a volume growth of 5.7% QoQ and INR depreciation of 6%; PAT, also, grew by 10.0% QoQ at Rs 14.32 billion. Operating margin (EBITDAM) bounced back by 264 bps (given absence of wage hike/visa cost pressures prevalent in Q1), while PAT margin declined 39bps on the back of lower other income and higher tax provisioning. We expect Infosys to report an earnings growth of 19.0% and 10.8% in FY09 and FY10, respectively. While a deteriorating macroenvironment, volatile domestic currency and management's cautious stance seem to urge caution, we believe the current price captures much of these risks. At the CMP of Rs 1,226 it quotes at 11.1x FY10E earnings. We rate it 'Accumulate' with a target price of Rs 1,443 (13x FY10E earnings)," says Prabhudas Lilladher's research report.
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