Emkay's research report on Infosys
Investments in the next generation technologies ( Design Thinking, Artificial intelligence, Automation etc) imperative to position Infosys better for the future as well as to regain lost ground in the traditional business
Infosys continues to stick to the deadline that NRN had set for catch up to industry growth rate which means that Infosys expects to achieve industry level growth by June’16 time frame
Investment in sales continues while attrition rate to moderate driven by the recent steps; Infosys continues to guide for EBIT margins in the range of 24-26% in the near term
Remain positive on the company however believe that ~25% outperformance V/s TCS since Jun’14 with valuation discounts to TCS at ~13-15% 1 yr forward P/E V/s ~25% earlier should drive a stall in stock outperformance in the near term.
"Infosys has embarked on journey to restore its status of ‘Industry bellwether’ with embrace of the next generation technologies and aim to catch up to industry growth by June’16. Infosys continue to invest in sales and guide for EBIT margins in the range of 24-26% in the near term. We remain positive on the company however believe that~ 25% outperformance V/s TCS since Jun’14 with valuation discounts to TCS at ~13-15% 1 yr forward P/E V/s ~25% earlier should drive a stall in stock outperformance in the near term. Reiterate BUY with unchanged TP of Rs 2,100", says Emkay Global Financial Services research.
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