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UBS Investment Research
Infosys Technologies Ltd.
R ead through from Cognizant 1Q results
Cognizant upgrades 2011 revenue guidance to ‘at least 29%’
Cognizant reported a 4.6% QoQ growth in revenue to US$1.37bn, in-line with
UBSe. The company raised its full year 2011 revenue guidance to at least
US$5.9bn, a 29% YoY up from 26% YoY guided earlier. This is slightly higher
than our US analysts' expectation of 28%.
Operating margin within the company’s target range 19-20%
Operating margin during the quarter stood at 19.4% well within the margin
guidance band of 19-20%. The management commented that most of the price
increase has already been factored in the last two quarters.
Guidance reinforces strong demand in FY12
Lack of revenue beat during the quarter was in-line with the Indian IT services
sector, reinforcing the seasonal weakness. However, increased 2011 guidance
underpins our 23% dollar revenue growth assumptions for Infosys. Underlying
trend such as net employee addition of over 7,200 also supports strong demand
outlook in 2011.
Valuation: reiterate Buy on Infosys
Cognizant's guidance upgrade reinforces the strong demand environment for the
sector. We maintain our Buy rating on Infosys with DCF based PT of Rs3,550
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Infosys Technologies Ltd.
R ead through from Cognizant 1Q results
Cognizant upgrades 2011 revenue guidance to ‘at least 29%’
Cognizant reported a 4.6% QoQ growth in revenue to US$1.37bn, in-line with
UBSe. The company raised its full year 2011 revenue guidance to at least
US$5.9bn, a 29% YoY up from 26% YoY guided earlier. This is slightly higher
than our US analysts' expectation of 28%.
Operating margin within the company’s target range 19-20%
Operating margin during the quarter stood at 19.4% well within the margin
guidance band of 19-20%. The management commented that most of the price
increase has already been factored in the last two quarters.
Guidance reinforces strong demand in FY12
Lack of revenue beat during the quarter was in-line with the Indian IT services
sector, reinforcing the seasonal weakness. However, increased 2011 guidance
underpins our 23% dollar revenue growth assumptions for Infosys. Underlying
trend such as net employee addition of over 7,200 also supports strong demand
outlook in 2011.
Valuation: reiterate Buy on Infosys
Cognizant's guidance upgrade reinforces the strong demand environment for the
sector. We maintain our Buy rating on Infosys with DCF based PT of Rs3,550
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