Buy Infosys; target of Rs 1306: Reliance Securities

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Reliance Securities's research report on InfosysInfosys posted better-than-expected results for 2QFY2015 on the top-line and net profit fronts, whereas the EBIT margin came in just in line with expectations. The company posted a 6.0% sequential growth in USD revenues to US$2,392mn V/s an expected US$2,339mn. Excluding the gains on termination of a contract, the company posted a 5.0% qoq growth in US$ terms. In Constant Currency (CC) terms, the company posted a 6.9% qoq growth in revenues. The EBITDA margin came in at 27.8% (V/s an expected 27.6%), an expansion of ~165bp qoq. The EBIT margin came in at 25.5%, just in line with our expectation, expanding by ~152bp qoq. Consequently, the PAT came in at `3,399cr (V/s an expected `3,345cr), a rise of 12.2% qoq. The revenue growth guidance in CC terms for FY2016 has been unchanged at 10-12% and dollar revenue guidance has been revised downwards to 6.4-8.4% V/s 7.2-9.2% earlier. The downward revision in US$ revenue growth guidance is to factor in the anticipated currency impact. We maintain our Buy rating on the stock with a target price of `1,306.The company has maintained its future CC revenue growth guidance for FY2016 at 10-12%. By FY2017, the company expects to lead industry growth and reach a milestone of achieving sales of US$20bn by FY2020. We maintain our Buy rating on the stock.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.

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