Buy Infosys; target of Rs 1200: Motilal Oswal

Motilal Oswal is bullish on Infosys has recommended buy rating on the stock with a target price of Rs 1200 in its research report dated January 09, 2018.

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January 10, 2018 / 17:31 IST

26 Aug, 2025 12:21

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Motilal Oswal's research report on Infosys

Infosys (INFO) has announced an Advanced Pricing Agreement (APA) with the US Internal Revenue Service (IRS), under which both companies have agreed on a methodology to allocate revenues and compute taxable income of the company’s US operations. The agreement covers a 10 -year period from FY11 -21.

Outlook
For INFO, we expect USD revenue CAGR of 8% and EPS CAGR of 7.1% over FY17 -20E. Lower earnings CAGR is a function of a 90bp decline in profitability and slight strengthening of the INR. However, we do not expect INFO’s performance to lag peers materially, especially after the company having swiftly addressed the heightened issues around governance with the appointment of Mr Nilekani to the Board and Mr Salil Parekh as the CEO. Our price target of INR 1,200 discounts forward earnings by 16x, implying an upside of 15%. Maintain Buy.

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