Hold Infosys; target of Rs 2650: ICICIdirect.com
Brokerage house ICICIdirect.com has recommended hold rating on Infosys with a revised price target of Rs 2,650, in its July 12, 2013 research report.
July 15, 2013 / 11:49 IST
ICICIdirect.com's research report Infosys
"Infosys' Q1FY14 earnings were generally upbeat - beating our and consensus estimates - led by an uptick in discretionary business (consulting and app dev contributed $47 million or 90 percent of the incremental revenues QoQ). However, the earnings commentary depicting discretionary demand trends was, surprisingly, grim. Majority of its clients - across geographies and verticals - are unwilling to spend their discretionary budgets (overall budgets continue to be under pressure) while decision cycle and pipeline, though improving, is not up to Infy's liking. Large deals, at-hand in the market, are predominantly re-bid deals. They carry lower margins and could continue to pressurise price realisations and margins. Overall, we were enthused by the earnings and suggest Infy could likely achieve the top end of its guidance but could still lag industry average.""We are adjusting estimates to account for a change in rupee assumption and quarterly beat. We now expect revenues, EPS to grow 12 percent, 6 percent in FY14E translating to revenue, earnings CAGR of 9 percent, 5 percent, respectively, in FY13-15E. Estimate and multiple revision leads to target price change. We now value Infosys at 14.8x (20 percent discount to TCS multiple) our CY14E EPS estimate of Rs 179.4 and raise our target price to Rs 2,650 vs. Rs 2,450 earlier. Hold the stock," says ICICIdirect.com research report.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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