Infosys Technologies- Disappointment writ all over :: EMkay

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Infosys Technologies

Disappointment writ all over

ACCUMULATE

CMP: Rs 2,989                                        Target Price: Rs 3,250

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n     ‘Disappointment writ all over’ as a 1.1% QoQ rev increase in a strong demand environment  with volumes declining by ~1% seq(V/s +1-2% QoQ assumed in the guidance)

n     FY12 rev guidance of 18-20% in line with expectations, however are dismayed by earnings outlook of Rs 126-128(+5.5-7.3% YoY) driven by lower margin assumptions

n     Cut FY12/13E EPS by ~7.6/9.2% to Rs 138/165 driven by lower rev ( +23%/17.5% YoY V/s 25%/20% earlier) and lower EBITDA mgns (31.4%/30.9% V/s 32.8/32.4% earlier)

n     Retain ACCUMULATE with a revised TP of Rs 3,250(V/s Rs 3,400 earlier), implying ~20xFY13E EPS, however would not rule out further near term weakness despite a 10% fall today.