Hold Infosys; target of Rs 3885: Sushil Finance

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Sushil Finance's research report on Infosys

"Infosys, in view of its 9MFY14 performance & current business outlook, we have slightly reduced our FY14E Revenue estimates. However, with better than expected EBIT margins we have upgraded FY14E earnings estimates. We have also upgraded our FY15E Revenues & earnings estimates. Going forward, we expect its FY14E & FY15E Revenues to grow by 24.8% & 18.1% respectively, while expect its APAT to grow by 12.8% in FY14E & by 10% in FY15E."

"With strong balance sheet (Net cash of USD 4.4 bn), low Debtor Days (65 days) and High Return Ratios (RoCE ~35%, RoE ~25%), along with FY15E Revenue growth expected to be better than industry growth, we increase our valuation multiple to 19x its FY15E earnings. The CMP of Rs. 3,551 discounts its FY14E & FY15E Earnings of Rs.185.8 & Rs.204.4 by 19.1x & 17.4x respectively. We maintain our ‘HOLD’ rating on the stock with increased price target of Rs 3,885," says Sushil Finance research report.

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