Buy Infosys; target of Rs 3047: Angel Broking

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Buy Infosys; target of Rs 3047: Angel Broking

Angel Broking is bullish on Infosys and has recommended buy rating on the stock with a target of Rs 3047 in its January 12, 2012 research report.

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RELATED NEWS Buy Induslnd Bank; target Rs 309: KRChoksey Buy IndusInd bank; target Rs 315: Prabhudas Lilladher Buy Jindal Steel; target Rs 510: Nirmal Bang ALSO READ See previous views by Angel Broking See what other Experts & Brokerages are saying about Infosys See messages about Infosys Infosys BSE | NSE 31/05/12 Are Mutual Funds betting on Infosys?

Angel Broking is bullish on Infosys and has recommended buy rating on the stock with a target of Rs 3047 in its January 12, 2012 research report.

"For 3QFY2012, Infosys' results came in lower than our as well as street's expectations on the USD revenue front; however, the company exceeded expectations on the INR revenue, margin and bottom-line fronts. The major disappointment came from the lowering of FY2012 USD guidance below our and consensus estimates to 16.4% from earlier 17-19% yoy. In addition, the company gave tepid revenue guidance for 4QFY2012 (almost flat qoq)."

"For 3QFY2012, Infosys reported revenue of US$1,806mn, up 3.4% qoq, aided by 3.1% qoq volume growth and 0.8% qoq blended pricing growth. In INR terms, revenue came in at Rs9,298cr, up by whopping 14.8% qoq. The company's EBITDA and EBIT margin increased by 265bp and 302bp qoq to 33.7% and 31.2%, respectively, largely gaining from INR depreciation. PAT came in at Rs2,372cr, up 24.5% qoq."

"Management commentary has turned cautious for the next year's budgets and expects it to be flat to marginally negative. Also, the company is witnessing delays in ramp-ups of the deals being signed. This is clearly reflected in the muted 4QFY2012 and FY2012 guidance given by management. We believe this clearly indicates challenging visibility in business volumes and management's future expectation. We expect the company to record USD revenue growth of 16.4% and 13.1% yoy in FY2012 and FY2013, respectively. We have revised our INR assumption downwards for 4QFY2012 and FY2013 to Rs51.0 and Rs50.0, respectively, following a steep 15% depreciation against USD over the last four months. This has led to INR revenue growth to be higher than USD revenue growth at 24.1% and 16.5% yoy for FY2012 and FY2013, respectively. Over FY2011-13E, we expect a CAGR of 19.2% and 19.0% in EBITDA and PAT, respectively. We value the company at 18x FY2013E of Rs169.0 and recommend a Buy rating on the stock with a target price of Rs 3047," says Angel Broking research report.    

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