Are brokers recommending to buy Infosys' shares after super Q2 results?

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Infosys reported a superb set of results on Friday with margins, profitability, bonus and outlook pleasing the markets. Although the Sensex crashed by 340 points on Friday, the Infosys stock rallied a huge 6 per cent. Here is what select brokers are saying after the Infosys Q2 results.

ICICI Direct

ICICI Direct has set a target price of Rs 4500 on the Infosys stock.

"We estimate Infosys will report revenue, EPS CAGR of 8 per cent, 12 per cent, respectively, over FY14-16E (with average 25.7 per cent EBIT margins in FY15- 16E), slower than 18.2 per cent, 12.2 per cent reported during FY09-14 along with average 28.1 per cent margins. Though the earnings trajectory could improve over time, the incoming CEO continues to impress with his strategic direction. The FY16E EPS upgrade coupled with target multiple raise to ~19x, 10% premium to its FY09-14 one-year forward PE average of 17.7x, leads to a revised target price of Rs 4500 and BUY rating vs. HOLD earlier," says ICICIdirect.com research report.

Are brokers recommending to buy Infosys' shares after super Q2 results?
Dolat Capital

Dolat Capital is upbeat on Infosys after the company's Q2 numbers. The firm has set a target price of Rs 4465 on the stock.

"We believe the strong volume growth (3 per cent QQ), better outlook (commentary and deal TCV of $600mn), improved trajectory (management has indicated better H2 over H1) and resilient OPM at about 25 per cent would help Infosys in its efforts on confidence restoration and would mean possible frequent upgrades as it keep on delivering in line with its achievable aspiration on improved volume/profitability. We have broadly maintained our estimates with a Revenue/ earnings CAGR of 14%/16% over FY15-17EWe up our rating to Outperformer on the stock with a TP of Rs 4465 valued at 18x on FY16E earnings (implies 15x FY17E)," says Dolat Capital research report.

Arihant Capital

Arihant Capital has put a hold rating on the stock of Infosys.

"Infosys's guidance for FY15 signifies the likely accrual of benefits coming from productivity improvement measures it has taken in recent times. Company is expected to benefit from tailwinds like retrenchment of non‐performers, scope for effort mix shift and improvement in utilization rates over long term. We believe Infosys deserve a re‐rating thus we have assigned a higher PE of 18.5x (16x) to its FY16E earnings and have arrived at fair value of Rs 4,146 per share. At CMP Rs 3,889, stock trades at 17.4(x) its FY16 earnings. We have HOLD rating on the stock," says Arihant capital markets research report.

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