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Last Updated : Nov 14, 2019 01:20 PM IST | Source: Moneycontrol.com

Infosys back in the green after 3-day losing streak; share price up 3%

Some brokerages are of the view that the stock remains a potential buy for the next 6-9 months horizon as the complaints are unlikely to have a great impact on the company's financials.

 
 
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After three consecutive sessions of losses, shares of Infosys traded with gains on BSE on November 14, rising as much as 3 percent in the first half of the session.

Shares of the company have been under pressure of late as reports of whistleblower complaints spooked investors.

Weeks after a whistleblower complaint, the board of software major was sent a second whistleblower letter, which accused CEO Salil Parekh of “eroding the company’s value systems” by incurring high and unnecessary travel costs.

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This was the second whistleblower letter that has become public, the first of which levelled more serious charges against Infosys’ top management, including fudging of accounts, and which set off a share price plunge and a series of internal and external probes.

The stock came under pressure after the whistleblower complaints as investors turned cautious. However, some brokerages are of the view that the stock remains a potential buy for the next 6-9 months horizon as the complaints are unlikely to have a great impact on the company's financials.

Axis Securities said little evidence of wrong-doing has emerged publicly so far, and the company is conducting a full-fledged investigation of the complaint.

"We believe higher revenue in H1FY20 led to greater unbilled revenue due to estimates on milestones. Management accounting could be termed aggressive. We do not see any greater impact on near-term financials," said Axis Securities.

The domestic brokerage firm has a buy recommendation on the stock with a target price of Rs 805, with a potential upside of 14 percent for a nine-month horizon.

Infosys reported a 5.8 percent sequential growth in Q2 FY20 with its net profit at Rs 4,019 crore. Revenue during the quarter rose 3.8 percent QoQ to Rs 22,629 crore. The same in dollar terms rose 2.5 percent at $3,210 million, in line with a CNBC-TV18 poll of $3,220.7 million.

Infosys signed $2.8 billion worth of deals during the September quarter.

Shares of the company traded 2.34 percent higher at Rs 707.45 on BSE around 1305 hours IST.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Nov 14, 2019 01:19 pm
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