Infosys Technologies Ltd (Q3 FY08): "No reason to cheer" - SELL Says Indiainfoline

Infosys (Q3 FY08) Result Update – "No reason to cheer"

CMP Rs1,580, SELL
Target price Rs1,534, Upside (2.9)%

ä Dollar revenue growth disappointing at 6.1% qoq with a marked slowdown in volume growth to 4.5% qoq.

ä Operational performance surprises for second consecutive quarter with 130 bps EBITDA margin improvement.

ä Tax reversal of Rs500mn pushes PAT growth to 11.9% qoq which otherwise was in line.

ä Status-quo in FY08 dollar revenue guidance was unsatisfactory. EPS guidance upgrade by 1.5-2% though above expectations was driven mainly by the tax reversal.

ä Downgrade estimates and remain negative with a price target of Rs1,534.

ä Maintain SELL on the Software sector as soft Infosys numbers will further dampen investment sentiment.

Software Valuations

Company	Price (Rs)	FY08EPS	FY09EPS	FY08 P/E (x)	FY09 PE (x)	FY07-10 profit CAGR %	1-year TP (Rs)	% up/(down) side	Reco
TCS	990	53.9	65.1	18.4	15.2	17.1	1,009	1.9	Sell
Infosys	1,577	81.6	95.9	19.3	16.4	14.2	1,534	(2.7)	Sell
Wipro	488	23.0	27.3	21.2	17.9	11.3	409	(16.2)	Sell
Satyam	411	25.8	30.9	15.9	13.3	15.0	433	5.3	Sell
HCL Tech	295	20.2	22.7	14.6	13.0	13.2	306	3.9	Sell
Tech Mahindra	1,043	60.9	75.9	17.1	13.7	18.5	1,063	1.9	Sell
Infotech	293	15.9	20.9	18.4	14.0	16.4	272	(7.3)	Sell
KPIT	120	7.9	10.6	15.2	11.3	19.4	127	6.0	Sell

Click below for the detailed update on Infosys Technologies Ltd.

http://www.indiainfoline.com/adserver/InverstorReportinfy140108.asp

Warm Regards,

India Infoline Research Team

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