Buy Infosys, says Rajiv Mehta

Rajiv Mehta, banking analyst at India Infoline told CNBC-TV18, "We have a buy recommendation in Infosys and we have raised our target price pretty significantly from Rs 3750 to Rs 4132. That is also been because we have rolled over our estimates in price to earnings (PE) multiples to FY16 earnings. We think that Infosys is a good story evolving especially on the margin front. We think that the worst of the margin headwinds are behind and margins should expand each year in FY15 and FY16 by 100 bps or more. So, that should drive a good earnings growth."

"Currently we are projecting 16 percent earnings compounded annual growth rate (CAGR) over the next three years. We think that it is deserving that stock trades at, at least a price/earnings to growth (PEG) ratio of 1 which is why our multiple is also 16 being assigned to the earnings which we are looking at Rs 260 for FY16," he said.