Sell Infosys; target Rs 2129: Nirmal Bang

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26 Aug, 2025 12:21

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Nirmal Bang is bearish on Infosys and has recommended sell rating on the stock with a target price of Rs 2129, in its July 12, 2012 research report.

“Infosys’ 1QFY13 performance was disappointing on all counts - revenue, margin and net profit. Revised FY13 guidance is far from encouraging, with a 5% reduction in US dollar (USD) guidance, but a mere 3.1% increase in rupee EPS guidance (at the upper end) in spite of taking Rs55/USD as conversion rate (Rs50.88 earlier). The fact that it has discontinued quarterly guidance is another indicator that the business environment is changing for the worse. Consequently, the stock witnessed an 8% battering on the bourses today. We believe any arguments stating low expectations for buying the stock are flawed, particularly when the company is unable to meet even watered-down expectations. We downgrade the stock to Sell with a revised target price of Rs 2,129 (Rs 2,473), implying a PE multiple of 12.5x FY13E EPS. We have downgraded our PE multiple to 12.5x, given the worsening revenue visibility and consistent earnings disappointments over the past several quarters.”

“The company’s 1QFY13 performance was disappointing on all counts - revenue, margin and net profit. Revised FY13 guidance is far from encouraging, with a 5% reduction in US dollar (USD) guidance, but a mere 3.1% increase in rupee EPS guidance (at the upper end) in spite of taking Rs55/USD as conversion rate (Rs50.88 earlier). The fact that it has discontinued quarterly guidance is another indicator that the business environment is changing for the worse. Consequently, the stock witnessed an 8% battering on the bourses today. We believe any arguments stating low expectations for buying the stock are flawed, particularly when the company is unable to meet even watered-down expectations. We downgrade the stock to Sell with a revised target price of Rs 2,129 (Rs 2,473), implying a PE multiple of 12.5x FY13E EPS. We have downgraded our PE multiple to 12.5x, given the worsening revenue visibility and consistent earnings disappointments over the past several quarters.”

“Infosys has discontinued giving quarterly guidance due to poor revenue visibility. Its revised FY13 guidance was disappointing (5% YoY vs our expectation of 6.8-8.8%) mainly on lower pricing. Rupee revenue growth and EPS guidance were also disappointing, at 19.7% YoY (our expectation was over 25%) and Rs166.46 (our expectation Rs175), respectively. We downgrade the stock to Sell with a revised TP of Rs 2,129 (Rs2,473 earlier), implying a PE multiple of 12.5x FY13E EPS,” says Nirmal Bang research report.

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