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