Reduce Infosys, target of Rs 1,246: Prabhudas Lilladher
Prabhudas Lilladher has downgraded its rating on Infosys Technologies to reduce with a target price of Rs 1,246 in its April 15, 2009 research report.
“Infosys Technologies (Infosys) declared its Q4FY09 results, which were largely in-line with our expectations. Revenues declined by 2.6% sequentially to Rs 56.4 billion and net profits declined by 1.7% sequentially to Rs 16.1 billion. Loss on currency hedging came down sharply to Rs 150 million from Rs 2,180 million in Q3FY09, which helped the net profits to negate the effect of 6.9% sequential decline in EBITDA. Total forward hedges stands at USD 506 million as on Q4FY09, as against USD 576 million as on Q3FY09.”
“Given the weak revenue and earnings CAGR over the next two years and continuing tough operating environment, Infosys stock is unlikely to attract investors for at least next 4-6 months. Valuation, while seemingly inexpensive at 13.2x FY10 earnings, need to be seen in the light of a low growth. Downgrade the stock to ‘Reduce’, target price of Rs 1,246,” says Prabhudas Lilladher’s research report.
Tags: infosys, Prabhudas Lilladher, reduce, sell
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