Motilal Oswal's report on Infosys
INFO’s CC revenue was flat, as against our estimate of +1% QoQ. The weak exit has led to guidance of 6.5-8.5% YoY CC growth for FY18, implying a CQGR of 2.2-3.0% v/s 1.4% CC CQGR in FY17. INFO’s guidance was keenly awaited as a cue to any potential recovery in demand given the positive BFSI undertones – which took a slight dent.
Outlook
The stock trades at 14.4/13.1x FY18/19 earnings. Our FY17-19 CC revenue/USD revenue/EPS CAGR stands at 8.4/8.2/6.3%. Our target price of INR 1,200 (17x FY19 earnings) implies 29% upside.
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