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Buy Infosys Tech, target of Rs 1640: Motilal Oswal
Motilal Oswal has maintained its buy rating on Infosys Technologies with a target of Rs 1640. Infosys reported in-line revenue growth of 5.3% QoQ and 18.9% YoY to USD 1,216 million for 2QFY09.
Motilal Oswal has maintained its buy rating on Infosys Technologies with a target of Rs 1640 in its November 14, 2008 research report. "Infosys reported in-line revenue growth of 5.3% QoQ and 18.9% YoY to USD 1,216 million for 2QFY09. Infosys guided for revenue of USD 4.72 billion-4.81 billion for FY09 v/s its earlier guidance of USD 4.97 billion-5.05 billion, implying 13-15% growth now v/s 19-21% growth earlier. The rupee revenue guidance for FY09 has been changed only marginally to Rs 213 billion-217 billion from Rs 213 billion-216 billion, implying growth of 28-30%. The company has maintained EPS guidance for the year at Rs 101.06 (the higher end), implying growth of 24%."
"We believe operating margins will be stable with a negative bias for 2HFY09. The company hired 17,299 employees in 1HFY09, which is 69% of the total guided gross hires for the year. We reduced our FY09 EPS estimate by 2% to Rs 100.4 and FY10 EPS estimate by 5% to Rs 109.1 and are revising our target price to Rs 1,640 (15x FY10E earnings) due to earnings growth deceleration to 17% over FY08-10 and prevailing uncertainties. Maintain Buy," says Motilal Oswal's research report.
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