Tuesday, October 13, 2015

Infosys: The Street view

Infosys' sharp fall in stock price after marking a record high on Monday has seen mixed reaction from brokers so far.

The quarter beat was overshadowed by the cut in full year US dollar revenue growth guidance, even though it was mainly driven by currency.

A summary of key points so far

Citigroup: says there were positives (growth, deal flow) and few concerns (guidance, attrition) in the quarter - however, the lack of "profitable growth" continues to be its biggest concern on the sector. Infosys reported only 2 per cent YoY growth in USD profit

Morgan Stanley: maintains "overweight" and a target of Rs. 1,300 per share. Broker says while management hinted at some client-/vertical-specific issues, it also suggested that it will endeavour to ensure H2 is better than its performance in past years

Credit Suisse: remains "neutral". Bank says with a weak base, achieving somewhere close to industry leading growth in FY17 would be a tough ask

UBS: maintains "sell" citing valuations. Broadly sees Q2 FY16 as the peak for fundamentals in the medium term. Says a weak Q4 FY16 could impact consensus revenue forecasts for FY17

Macquarie: still keeps "outperform" rating. Says guidance miss was disheartening but one should not worry about a potential earnings cut, as other operating indicators continue to remain healthy

Jefferies: says given strong deal win momentum and low ask rate, Infosys should still end FY16 at the top end of its guidance.

No comments:

Post a Comment