Research Notes – October 18, 2010

Reiterate ‘buy’ on Infosys – TP hiked to Rs.3500

 Buy call on Infosys is reiterated with a one year target price of Rs.3500, as the company’s second quarter performance looked above street estimates.

 Performance of the company in 2QFY11 appears to be the strongest one since September 2006.

 Strong USD revenue growth at the rate of 10.2% q-q indicates an elevated growth trajectory ahead.

 Deal market remains robust and management has noted that the deal pipeline is the strongest ever. Already entered into nine transformational deals in the first half amounting to USD 865 million.

 EPS estimate for FY11 appears very conservative, considering better than expected USD revenue growth of the company. For the past six quarters, USD revenue growth is 4% above the company’s guidance.

 Reiterate buy with a target price of Rs.3500 over the next one year term.

Source: Geojit

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