Infosys ::Emkay: Top Buys

Please Share::  India Equity Research Reports, IPO and Stock News

Visit http://indiaer.blogspot.com/ for complete details �� ��

Investment Rationale
§ Infosys continues to be one of the two top picks within the Tier 1 coverage universe on account of
Ø Preparing the business model for future and targeting at 1/3rd of revenues each from Business
operations (apps devt and maintenance), Transformation (package implementation and consulting) &
Innovation (products and platforms) V/s. contribution of 60%/32%/8% currently.
Ø Temporary blips but prepared for the next wave of demand increase by way of new restructuring in
business units
Ø Higher exposure to discretionary spending (~25% of revenues in Q1FY12) expected to help Infosys
grow its US$ revenues at ~19% in FY12 on the back of ~26% growth rate in FY11
Ø Investors expectations more sanguine leaving room for positive surprises. Expect 16%/9%/11% US$
Rev/EBITDA/PAT CAGR over FY11-13E and see margins levers in the form of (1) increase in
utilizations (2) broadening of employee pyramid (3) increasing proportion of non linear revenues
Valuations
§ At CMP of Rs 2,222, the stock is trading at a P/E of 16.8x/15.1x on FY12E/FY13E earnings of Rs 132.4/146.9
respectively.
TP : Rs2,500

For full list click link below:

Emkay: Top Buys and Sells