Buy Infosys; target of Rs 1210: Centrum

Infosys delivered a strong 2QFY17 with topline, EBIDTA and PAT above our estimates.  However, Infosys cut its revenue growth guidance to 8-9% for FY17 (vs 10.5-12% constant currency growth earlier). Infosys cut its USD revenue growth guidance to 7.5-8.5% for FY17E (vs 10-11.5% earlier). The new USD revenue growth guidance implies a sequential decline in revenues by 0.6% CQGR at the lower end to growth of 0.6% CQGR at the upper end over the next two quarters. While we anticipated a guidance cut post 2QFY17, quantum of cut is higher than our expectation which is negative. We model Infosys USD revenues to grow by 8.4% for FY17 (vs 8.9% modelled earlier). This would require Infosys to deliver 0.5% CQGR over the remaining two quarters. Net cash on balance sheet stands at Rs 356bn (15% of Mcap). Margin beat for 2QFY17 leads us to retain our EPS estimates.  Our TP is retained at Rs 1,210/sh (17.5x FY18E EPS). Maintain BUY.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.