Accumulate Infosys; target of Rs 1500: Dolat Capital

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Dolat Capital's research report on Infosys

USD revenue grew 0.9% QoQ in line with our estimates; 2.3% QoQ in CC terms. EBIT margin declined 104bps QoQ at 23.7% due to negative impact of wage hike and visa cost. INFO maintained its revenue guidance to 6%-8% (CC terms) which translates into a CAGR of 0.3%-1.5% over three quarters. The management has also maintained its EBIT margin guidance in the range of 22%-24% for FY19 despite the positive impact of INR depreciation.

Outlook

We upgrade our earnings estimates by 1.4%/3.2% for FY20/FY21 mainly because of INR depreciation; our estimates remain same on a CC basis. Maintain our ACCUMULATE rating and rollover to Sep’19 TP of `1,500. (16x target PER).

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