Buy Infosys; target of Rs 1092: Axis Direct

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Axis Direct's report on Infosys

Infosys recorded 24.6% EBIT margin in FY17, higher end of its guidance band (24-25%). However, for FY18, it has lowered its EBIT guidance to 23-25% due to a couple of factors: INR appreciation and investments in onsite development center amidst uncertainty around visa regulations/ increasing local hiring. Management will focus on improving offshore mix (43% of rev; high of 50% in last 5 years), cost optimization and automation tools to drive margin performance.

Outlook

Increasing realization and growth in next-gen services may provide upside and we would watch for margin improvement from the same. We rollover our target price to FY19E and value the company at 15x P/E. Maintain BUY with TP of Rs 1,092(17% upside). At the CMP of Rs 935, the stock trades at 14x/ 13x FY18/ FY19 EPS of Rs 66/ Rs 73.

For all recommendations, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.

Read More