Accumulate Infosys; target of Rs 1187: KR Choksey

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KR Choksey's research report on Infosys

Revenue in dollar terms stood at $2,755 Mn, up 1% qoq and 8% yoy. Dollar revenue was below our estimates of $2,770 Mn, primarily owing to furloughs, and shifting of deals to the later period. By Geography: Europe outperformed with a 6.2% qoq growth, followed by North America at 0.7% qoq growth. The growth in the US region remained subdued due to seasonal weakness. By Industry: Insurance led the pack with 7.3% qoq growth, followed by Energy & Utilities which grew 6.5% qoq. Growth in the Banking & Financial Service segment saw a decline of 1.6% largely due to reduction in budget allocation. By Services: Business Process Management (BPM) led the growth pack with a 5.0% qoq growth, followed by Application Maintenance  at 2.3% qoq growth and Consulting  at 3.9% qoq growth.

Outlook
We are giving an “Accumulate” rating on the stock and we are assigning a multiple of 15X to its FY20E EPS of INR 79.1 to arrive at a target price of INR 1,187, an upside of 10% compared to CMP of 1079.
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