Sell Infosys; target of Rs 1150: Dolat Capital

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Dolat Capital's research report on Infosys

USD revenue grew 1.8% QoQ tad below our estimates; 0.6% QoQ in CC terms. EBIT margin remained flat QoQ at 24.2% despite negative impact of wage hike offset by operational efficiencies. INFO slashes its revenue guidance to 6%-8% (CC terms) which translates into a CAGR of 1.6%-2.3% over four quarters. The management has lowered its EBIT margin guidance in the range of 22%-24% for FY19 as compared to 23%-25% for FY18 due to investment in digital services.

Outlook

This further increases the EBIT margin gap vs TCS and hence we believe INFO will continue to trade at a discount vs TCS (10%). INFO is trading at fair valuations of 15.8x/14.6x based on FY19/FY20 earnings given its muted earnings CAGR of 5%(FY18-21E). We maintain our SELL rating with Jun’19 TP of ` 1,150 based on 14.5x FY20 earnings.For all recommendations report, 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