Hold Infosys; target of Rs 955: ICICI Direct

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ICICI Direct's research report on Infosys

Infosys’ revenues grew 2.9% QoQ in dollar terms driven by broad based growth across revenue segments accompanied by improvement in realisation (up 1.3% QoQ). The management sounded optimistic on BFSI on a mid to longer-term basis on the back of higher client spending and deal pipeline. In terms of outlook for FY18E, there was disappointment on the revenue front as Infosys has cut its FY18E revenue guidance to 5.5- 6.5% from 6.5-8.5% earlier in constant currency terms.

Outlook

Infosys reported a decent performance during the quarter. However, there was disappointment on weaker-than-expected revenue guidance for FY18E. We have cut our earnings estimates by 1-2%. We continue to maintain our HOLD recommendation till clarity emerges on appointment of the new CEO. We value the stock at Rs 955 per share (14x FY19E EPS of Rs 68.2 per share).

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