IT bellwether Infosys is likely to beat the Nasscom guidance and grow 11-13 percent year-on-year, says broking firm Jefferies. Nasscom has given a growth guidance of 10-12 percent YoY for FY17E. Jefferies has maintained its 'buy' rating on the stock.
"Despite concerns on macro and industry deceleration, momentum is likely to sustain on the back of strong deal pipeline and order book," the Jefferies report says.
When compared with other large cap peers, Infosys has reported the highest dollar revenue growth YoY. Jefferies believes Infosys can sustain this momentum given the order book, deal pipeline and commentary on deal win rates.
Additionally, the company has also shown strong growth in top accounts as a result of CEO Vishal Sikka's personal intervention, the Jefferies report says."This presents an opportunity to replicate this success across a broader set of accounts. In addition, opportunities for improvement also lie on the cost side where increased automation can sustain/ increase the high levels of utilization, and reduce bench and subcontracting costs over the short to medium term," Jefferies adds.
The only risks to this upside are weakening macroeconomic scenario, higher competitive intensity, unfavourable cross-currency moves and a stronger rupee, the broking house says.
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