Buy Infosys; target of Rs 1158: KR Choksey

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KR Choksey's research report on Infosys

Revenue in dollar terms stood at $2,651 Mn, up 3.2% qoq and 6% yoy. Dollar revenue was above our estimate of $2,642 Mn, which was due to 1.8 qoq improvement in realizations and 1.7% volumes growth qoq.  •By Geography: India outperformed with a 15.7% qoq growth, followed by ROW at 7.4% qoq growth and Europe at 4.6% qoq growth  •By Industry: Telecom led the pack with a 8.4% qoq growth, followed by Energy & Utilities which grew 7.3% qoq. Growth in the BFSI and Manufacturing segment was soft at 2.6% 2.3% respectively.  •By Services: Testing services led the growth pack with a 6.6% qoq growth, followed by Product Engineering Services at 5.8% qoq growth and Application Development at 3.9% qoq growth.

Outlook

We believe that the company’s deployment of automation amongst other disruptive technologies, both internally and externally, should lead to profitability outpacing revenue growth. We have “BUY” rating on the stock and as we assign multiple of 15x to its FY19E EPS of INR. 77 to arrive at a price target of INR 1,158.

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