Brokerages Are Saying “Buy” Infosys Stock After Robust FY Q3 2014-15 Numbers

Business

oi-Sunil

By Sunil Fernandes

Updated: Saturday, January 10, 2015, 8:24 [IST]

Infosys posted a super set of Q3 numbers for the quarter ending Dec 31, 2014. The street is unanimous that Infosys has performed well and almost all brokerage firms have raised their target price for the stock. The expectations now is of a higher price target then that is currently prevailing.

In fact, many see the valuation gap between Infosys and TCS narrowing. Here is what brokerages are saying on the Infosys stock.

Dolat Capital

"We maintain our rating of Market-performer on the stock with a target price of Rs 2285 valued at 16x on FY17E earnings (inline with current discounting). Accumulate the stock for target price of Rs 2285", says Dolat Capital in its research report

Dolat Capital feels that the strong volume growth (4.2% QQ), better commentary outlook, broad basing of growth and improved OPM profile at about 26% would help Infosys in its efforts on confidence restoration and would mean sustained marketperformance as long as it keep on delivering in line with its aspiration on improved volume (15%+) and profitability (26%+).

ICICI Direct

"We expect Infosys to report revenue, EPS CAGR of 8%, 14%, respectively, in FY14-16E (with average 26.1% EBIT margins in FY15-16E), slower than 18.2%, 12.2% reported in FY09-14 along with average 28.1% margins. Healthy volume growth, client additions and improving operating metric could aid growth momentum. We continue to value Infy at 20x its FY16E EPS (13% premium to its FY09-14 one-year forward PE average of 17.7x) and maintain our Rs 2,400 target price and BUY rating. Buy the stock with a target price of Rs 2400", says ICICIdirect.com research report.

Independent Analysts

Several independent analysts who came on business channels suggested buying the Infosys stock. The revised target for the stock is around Rs 2200, which could be another 5 per cent from here on.

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