Infosys Technologies Ltd (Infosys) : Quarterly Result Update

Infosys Bangalore Campus

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Infosys Technologies Ltd (Infosys) Q2 FY10 result was above its guidance. Infosys reported EPS of Rs.26.83 in Q2 FY10 which was significantly higher than its guidance of Rs23.67-24.09 and also beat the market expectations.
Revenues increased 2.1% QoQ in Rupee terms and 2.9% QoQ in dollar term signalling sign of recovery in the demand.
EBITDA margin improved to 34.6% (+47 bps QoQ) driven by strong performance at the top line. However, net margin declined 33 bps QoQ to 27.6% in Q2 FY10 on account of lower other income which declined 12.3% QoQ during the quarter. Other income declined due to lower interest income on deposits with
banks and other institutions.

At current price of Rs.2211 Infosys is trading at PE multiple of 22.1 for FY10E estimated EPS of Rs.100, which we believe Infosys is fairly valued at current price levels. However, we can see a strong upside going forward if the demand environment recovers significantly and rupee depreciates against the US dollar.

Thanks to : www.nirmalbang.com

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