Buy Infosys, target of Rs 1595: Sharekhan

Sharekhan has maintained its buy rating on Infosys Technologies with a target of Rs 1595 in its January 13, 2009 research report. “Infosys Technologies’ (Infosys) top line grew by 6.8% quarter on quarter (qoq) and 35.5% year on year (yoy) to Rs 5,786 crore in Q3FY2009. The reported net profit rose by 14.9% sequentially. The company reported tax reversal of Rs 62 crore in Q3FY2008. Adjusting for the same, Infosys’ net profit grew by 10.3% sequentially to Rs 1,579 crore. ”

“We have revised our exchange rate assumption to Rs 46 for FY2009 and FY2010. This has led to a 0.3% increase in our FY2009 earnings estimate (despite adjusting for the cross-currency impact in FY2009). For FY2010, we have incorporated a price-cut of 3% in our estimates, as the management highlighted that the company is facing difficulty on the pricing front in the current environment. The price-cut assumption more than offset the positive impact of exchange rate assumption.

Though macro environment remains challenging in near term, Infosys is one of the few options left for investment in IT space (after Satyam’s debacle and disclosure by Wipro) and is likely to command premium compared to its peers. We maintain our Buy recommendation on the stock with revised price target of Rs 1,595,” says Sharekhan’s research report.

source: Moneycontrol

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