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Infosys Technologies (INFY.BO)
Research Tactical Idea
We believe the share price will rise relative to the country index over the next 60 days.
This is because the stock has traded off recently, making short term valuation much more compelling. Post muted 4Q11
results and weak FY12e EPS guidance, Infosys stock has corrected by ~10%. We believe Infosys has used 2HFY11 to
prepare for upcoming growth in FY12. It has lowered its utilization from a peak of 83% to ~75% now and has maintained
margins at 29.4% despite a 4% rupee appreciation for the year. As we move into FY12, volumes could surprise positively
over the coming quarters, in our view, and we think that pricing, productivity benefits could lead to upward EPS guidance
revisions.
We estimate that there is about an 80%+ or "highly likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Overweight
Industry View: In-Line
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Infosys Technologies (INFY.BO)
Research Tactical Idea
We believe the share price will rise relative to the country index over the next 60 days.
This is because the stock has traded off recently, making short term valuation much more compelling. Post muted 4Q11
results and weak FY12e EPS guidance, Infosys stock has corrected by ~10%. We believe Infosys has used 2HFY11 to
prepare for upcoming growth in FY12. It has lowered its utilization from a peak of 83% to ~75% now and has maintained
margins at 29.4% despite a 4% rupee appreciation for the year. As we move into FY12, volumes could surprise positively
over the coming quarters, in our view, and we think that pricing, productivity benefits could lead to upward EPS guidance
revisions.
We estimate that there is about an 80%+ or "highly likely" probability for the scenario.
Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the
scenario.
Stock Rating: Overweight
Industry View: In-Line
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