What are analysts saying about Infosys' buy of Lodestone?

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  Infosys shares have given up early gains and are now trading flat at Rs 2500, reflecting the market's disappointment over the Lodestone acquisition. And while analysts have welcomed the move, the widely held view is that the deal size is not significant to make a difference to Infosys’ earnings, as the company grapples with slowing revenue growth caused by a combination of internal and external factors.
Infosys has cash of over Rs 20,000 crore on its books, and the market has been hoping for some large-sized deal that could boost Infosys’ numbers. Here is what some brokerages have to say about the deal:   Edelweiss Capital:
We believe the acquisition is a step in the right direction as Infosys’ revenue growth was lagging peers; it also quells investor concerns on deployment of cash (USD 3.7bn cash as of June 2012). Further, the acquisition enables significant cross selling opportunities which could boost revenue growth. We believe the acquisition is a reflection of Infosys’ gradually changing mindset, and it is relatively more flexible now in pursuing inorganic growth opportunities than before. We maintain "buy".   Prabhudas Lilladher:
Infosys has been looking for acquisition from a long time to strengthen its
presence in Consulting and Package Implementation domain. After losing-out
on Axon acquisition, Infosys organically grew its C&SI revenue to USD 525 mn (5% CQGR over last 20 quarters). We see this acquisition as much needed inorganic booster for the company. We reiterate "buy" rating with a target price of
Rs 2,850.   Ambit Capital:
Our recommendation is a sell on Infosys. Our valuation is about Rs 2,580. We think the stock might react positively because expectation of an acquisition has been in the work for a long time. The fact that they have deployed capital with a relatively interesting asset, which gives them greater presence in Europe, I would expect the stock to react positively to it. That said, given that it will only be earnings accretive from FY15 could be something the market will take time to chew on. Govind Agarwal, JM Financial:
This is a good strategic fit for Infosys. We are seeing a lot more deal activity in Europe in terms of new outsourcers and new companies looking to outsource. In terms of structuring of the deal, they are paying only two thirds of the amount right now and one third of the amount will be paid after three years. It will ensure a smooth transition for the current management team. On the margin side, we would not be too much worried because it is a too small a transaction to impact margins. In any case in high end consulting, the margins are on the lower side. It is more to acquire new clients. Once you do that, you can also have a lot of downstream revenues.