Buy Infosys; target of Rs 1345: Axis Direct

Axis Direct's research report on Infosys

The management maintained its constant currency revenue guidance of 5.5-6.5% YoY growth and also USD revenue guidance of 6.5-7.5% YoY growth with an ask rate of -1% to 3% QoQ. Seasonal weakness, softness in BFSI, and client-specific issues are likely to impact Q4. Given the strong deal wins (8 large deals worth TCV of USD 779 mn won during the quarter), we expect ramp-up of these deals to drive growth in FY19/20. Further, the momentum is likely to pick up in BFSI and expected to perform better in CY18. Overall, Europe is seeing better momentum than the US.

Outlook

We reiterate our BUY rating with target price of Rs1,345 (17x FY20E EPS) implying upside of 25% from CMP of Rs 1,078. The stock trades at 15x/14x FY19E/20E of Rs 72/79. For all recommendations report, click here

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