Tech major Infosys has seen its stock rally in the last few days and the shares are now steady around the current levels. Here are 5 reasons why the Infosys stock could be a good bet at the current levels.
Valuations lesser expensive than TCS
Of course, analysts would be worried if one compares p/e valuations of Infosys and TCS, simply because TCS is growing faster than Infosys. However, the fact remains that TCS is horribly expensive at current levels and considering Infosys' own growth prospects, we could easily bet on Infosys.
Good defensive bet against rising geo-political tensions
IT stocks like pharma and FMCG are defensive stocks. What this means is that when the markets come crashing down, they fall to a much lesser extent and in many cases may not fall at all. This makes the Infosys stock a good play at the current levels considering that Obama has ordered a strike in Iraq and Ukraine tensions continue.
Infosys has a huge cash balance
Infosys has a cash and cash equivalent balance of close to Rs 24,000 crore. This is likely to help aid growth by strategic buyouts or a buyback of shares, which could be in the offing.
Optimism over CEO Vishal Sikka
There is increased optimism that newly appointed CEO of the company Vishal Sikka will help growth at the company. He has already ordered promotions to boost employee morale.
Buyback of shares possible
If the company is not able to make strategic buyouts in the near future, it's highly possible that there could be a buyback of shares at a higher prices than the current market price of Infosys.