PINC Research is bullish on Infosys and has recommended buy rating on the stock with a target price of Rs 2730 in its August 22, 2011 research report.
“Infosys, the management has indicated that there is no revision in the guidance (18-20%YoY revenue growth) as of now, due to S&P downgrade of US debt rating. There are some delays in decisions related to the discretionary projects and ramp ups got affected but no project has been cancelled. As of now, no pricing negotiations have been done; in fact there has been increase in revenue productivity and the management does not expect pricing to decline in the short term due to global uncertainty. Clients are uncertain in a short term and not going for long term projects. No pricing negotiations and no project cancellations. Over the last two years Infosys has won large deals and currently working on ~30 transformational projects.”
“The campus offers given in last year to be inducted in FY12 is as per plan. The hiring of laterals will be as per the demand environment. Also, the utilisation is very low so lateral hiring might be lower if the demand slows down. The current utilisation (excl trainees) is 74.9% and the management is comfortable to keep it in the range of 78-82%. The strategic direction is to move towards a balanced share (33% each) of revenue from i) Consulting & SI business, ii) Business IT services and iii) Products, platforms and solutions. The current contribution is 30%, 61% and 8.5% respectively for above three segments. Maintain ‘BUY’ recommendation on Infosys with a target price of Rs 2,730 based on 17.5x FY13E earnings,” says PINC Research report.
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