Accumulate Infosys; target of Rs 2975: PINC Research

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Accumulate Infosys; target of Rs 2975: PINC Research

PINC Research is bullish on Infosys and has recommended accumulate rating on the stock with a target of Rs 2975 in its January 12, 2012 research report.

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RELATED NEWS Buy Reliance Industries; target Rs 762: Nirmal Bang Buy Punjab National Bank; target Rs 875: Nirmal Bang Buy Axis Bank; target Rs 902: Nirmal Bang ALSO READ See previous views by PINC Research See what other Experts & Brokerages are saying about Infosys See messages about Infosys Infosys BSE | NSE 30/05/12 Are Mutual Funds betting on Infosys?

PINC Research is bullish on Infosys and has recommended accumulate rating on the stock with a target of Rs 2975 in its January 12, 2012 research report.

"Infosys, Q4FY12 dollar revenue guidance talks about 13%YoY growth which we believe is the bottoming out of the current weakness in the demand environment. The deal pipeline is healthy according to the management. The decisions have been delayed on discretionary IT spending but if we assume a stable macro environment during the next year the dollar revenue should stabilise on YoY basis."

"Infosys has added 49 new clients in Q3 (highest addition in a quarter, had same addition earlier as well in Q1FY09). Compared to 140 new client additions in FY11 there has been new client addition of 120 in 9MFY12. Gross hiring for 9MFY12 was 34,929 employees out of which 10,239 were laterals (29.3% of overall gross hiring). Pricing for IT services grew 0.8%QoQ in constant currency terms. Reported pricing remained flattish. The management expects stable pricing going ahead. Q4FY12 USD revenue guidance is at Q3FY12 pricing. There were 5 large deal wins in Q3; out of which 2 were in Europe. 2 of 5 large deals were of TCV value of USD500mn+. Europe has shown significant growth of 14%QoQ on the back of deal wins in previous quarters."

"Infosys has been preparing for growth which is likely to pick up in FY13 as the new client additions have been robust and the firm has hired despite lower utilisation in a bid to prepare for the expected growth next year. The management has shown strong indication to maintain stable pricing. If the macro environment does not materially deteriorate further we believe that Infosys is likely to deliver USD revenue growth of 13%YoY in FY13. We have revised our tax rate assumption for FY13 to 28% from 27% earlier. Our FY13 EPS is revised marginally downwards by 2.6% to Rs165. Maintain 'Accumulate' rating with a TP of Rs 2975 based on 18x FY13E EPS," says PINC Research report.  

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