Infosys Limited In line show marred by heightened expectations :Emkay

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Infosys Limited

In line show marred by heightened expectations

ACCUMULATE

CMP: Rs2,794                                        Target Price: Rs3,250

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n     Infy reported marginally lower than expected operating performance (4.3% QoQ US$ rev growth with a 300 bps QoQ decline) with profit beat driven by higher other income

n     Opmetrics performance mixed with top 5/10 clients growing by ~7.7/5.6% QoQ while Europe up by ~0.5% QoQ despite cross currency aid as Telecom continues to drag(-7% QoQ)

n     FY12 rev guidance unchanged at 18-20% YoY while INR EPS outlook raised to ~Rs 128-130 along expected lines. Sep’11 outlook disappointing at +3.5-5% QoQ given historical record

n     Tweak FY12/13E EPS down by 0.7/0.6% to ~ Rs 138/164, ACCUMULATE with an unchanged TP of Rs 3,250. Macro uncertainty plus INR appreciation remain downside risks