Infosys reported its Q2FY18 earnings on Tuesday. It has cut its revenue guidance for the full year FY18. The management cited seasonal headwinds in second half of the year and expect specific softness in Q3 and Q4.
In an interview to CNBC-TV18, Urmil Shah, AVP Research Analyst at IDBI Capital, Sanjeev Hota, AVP Research at Sharekhan, Girish Pai of Nirmal Bang Institutional Equities and Trip Chowdhry of Global Equities Research shared their readings on the earnings as well as their outlook on how the stock would react in today’s trading session on the back of its quarterly numbers.
From a revenue standpoint, they delivered up to my expectation but surprise was on the margin front. The room to grow margins from here is very limited, Pai said.
Growth is going to be sluggish for this company going forward into FY19 and FY20. We are expecting 5.5-6 percent kind of growth to come through on dollar revenue front with some kind of margin compression, he added.
We remain cautious on the technology sector in general and on Infosys. We have raised our target price from Rs 840 to Rs 875, Pai further mentioned.
No need for structural change in the strategic roadmap and now under Mr Nandan Nilekani, the board has put down concerns on corporate governance – these are the two positives for the company, said Shah.
Still positive on the uptick in the growth in FY19. We have accumulate recommendation on Infosys and a price target of Rs 1,000, Shah added.
HCL Technologies is our only buy amongst largecap stocks with a target price of Rs 1,038, he said.
Infosys is still a wait and watch for me. I still have a hold rating on Infosys, said Hota.
For entire discussion, watch accompanying video...
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