ICICI Direct's research report on InfosysInfosys reported robust Q3FY16 earnings as dollar revenue growth and EBIT margins were ahead of our and consensus estimates US$ revenues grew 0.6% QoQ to $2,407 million, above our 0.5% decline and $2,380 million estimate Infosys raised its FY16E constant currency (CC) revenue growth guidance to 12.8%-13.2% vs. 10-12% earlier and its US$ guidance to 8.9%-9.3% (6.4-8.4%) Reported PAT of | 3,465 crore was also above our | 3,303 crore estimate led by revenue beat We estimate Infosys will report revenue, PAT CAGR of 14.5%, 11.5%, (13%, 10% earlier) respectively, over FY15-17E (with average 25.2% EBIT margins in FY16-17E), slower than 19%, 15% reported during FY10-15 along with average 27.4% margins. Over time, earnings trajectory could improve further as strategic initiatives (such as top account mining, large deal wins, lower attrition, improving per-capita productivity) of the new management are bearing early fruits. We continue to value Infosys at 20x its FY17E EPS (15% premium to its FY10-15 one-year forward PE average of 17.4x) to arrive at our target price of | 1,350.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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