October 19, 2016 / 17:12 IST
Axis Direct's research report on Infosys
Challenging macro and weak BFSI has led to Infosys’ FY17 revenue guidance cut being higher at 250-300 bps (in cc terms) to 8-9%. Revenue target seems achievable given large deals wins in FY16/H1FY17, strong client mining and consistent progress under its new/differentiated offerings of MANA, Panaya, Skava, Design Thinking (DT) etc. However, lack of triggers in FY17 (muted growth in Q3, Q4) would keep the stock range-bound.
Given weak macro and muted demand environment, we expect FY17E/FY18E USD revenue growth of ~8.5%/ 10% (earlier: 9%/ 11%). However, better execution and higher other income leads to no material change in our FY17E/ FY18E EPS at Rs 63/ Rs 72. We believe its differentiated growth strategy on “Renew and New” and accelerated focus on client mining / large deals will play out in the long term. Our TP stands at Rs 1,075 (15x FY18E EPS), implying 5% upside from CMP of Rs 1,027. The stock trades at 16x FY17E / 14x FY18E earnings.
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.
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
