Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.icicidirect.com/mailimages/ICICIdirect_Infosys_Q4FY12.pdf
I n f y s e t s f l o o r f o r F Y 1 3 E g r o w t h …
Infosys reported its Q4 revenue/earnings below its guidance and our
estimates. US dollar revenues declined 1.9% QoQ vs. our 0.5% QoQ
growth estimate while rupees revenues declined 4.8% QoQ vs. our 1.3%
decline estimate. That said, FY13E US$ revenue growth (8-10%) and EPS
guidance (| 158.8 –161.4, | 156 our estimate) was a revelation. Rationale
for the soft Q4FY12 and FY13E guidance include delay in anticipated
project ramp-ups, ramp-downs for select US financial services customers
and subdued insurance vertical performance coupled with uncertainty
over CY12E IT budget spending patterns. Albeit, Infosys still hired 4,727
laterals and 5,949 freshers (both gross) in Q4FY12. Noticeably, Q4 lateral
additions were the largest for any Q4 since Q1FY04 and second highest
among all quarters since Q1FY04 (the highest being 5,212 in Q3FY11). We
believe Infosys likely set the floor for FY13E growth by guiding
lower, relative to Street, with an opportunity for upward revision in
subsequent quarters. We introduce FY14E; modestly raise FY13E
revenue/EPS estimate to |38,427 crore/| 159.6 vs. | 37,763 crore/| 156
earlier and consensus at | 39,672 crore/| 169 & maintain our BUY rating.
ƒ Earning Summary
Infosys reported Q4FY12 revenues of | 8,852 crore (22.1% YoY
growth and 4.8% QoQ decline) below our | 9,181 crore estimate.
EBIT of | 2,647 crore was below our | 2,990 crore estimate led by
lower revenue growth. At 29.9%, operating margins were in-line
with our 29.9% estimate led by G&A rationalisation (6.3% of Q4
revenues vs. 7.1% in Q3). The company earned | 40.5 in EPS in line
with our | 40.7 estimate aided by other income (| 652 crore vs. our
| 479 estimate) and offset by higher tax rates relative to estimate.
V a l u a t i o n
We expect FY13E US$ revenues to grow 9% while rupee revenue/EPS
could grow 13.9%/9.7%, respectively. This translates to a revenue/EPS
CAGR of 15.5%/13.6% during FY11-14E. Further, we expect EBIT margins
to decline 72 bps in FY13E. We change our valuation methodology and
now value Infosys based on CY13E EPS estimate. We have valued Infosys
at 16x our CY13E EPS estimate of | 170 and maintain our BUY rating with
a revised target price of |2,720 vs. | 2,950 earlier.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.icicidirect.com/mailimages/ICICIdirect_Infosys_Q4FY12.pdf
I n f y s e t s f l o o r f o r F Y 1 3 E g r o w t h …
Infosys reported its Q4 revenue/earnings below its guidance and our
estimates. US dollar revenues declined 1.9% QoQ vs. our 0.5% QoQ
growth estimate while rupees revenues declined 4.8% QoQ vs. our 1.3%
decline estimate. That said, FY13E US$ revenue growth (8-10%) and EPS
guidance (| 158.8 –161.4, | 156 our estimate) was a revelation. Rationale
for the soft Q4FY12 and FY13E guidance include delay in anticipated
project ramp-ups, ramp-downs for select US financial services customers
and subdued insurance vertical performance coupled with uncertainty
over CY12E IT budget spending patterns. Albeit, Infosys still hired 4,727
laterals and 5,949 freshers (both gross) in Q4FY12. Noticeably, Q4 lateral
additions were the largest for any Q4 since Q1FY04 and second highest
among all quarters since Q1FY04 (the highest being 5,212 in Q3FY11). We
believe Infosys likely set the floor for FY13E growth by guiding
lower, relative to Street, with an opportunity for upward revision in
subsequent quarters. We introduce FY14E; modestly raise FY13E
revenue/EPS estimate to |38,427 crore/| 159.6 vs. | 37,763 crore/| 156
earlier and consensus at | 39,672 crore/| 169 & maintain our BUY rating.
ƒ Earning Summary
Infosys reported Q4FY12 revenues of | 8,852 crore (22.1% YoY
growth and 4.8% QoQ decline) below our | 9,181 crore estimate.
EBIT of | 2,647 crore was below our | 2,990 crore estimate led by
lower revenue growth. At 29.9%, operating margins were in-line
with our 29.9% estimate led by G&A rationalisation (6.3% of Q4
revenues vs. 7.1% in Q3). The company earned | 40.5 in EPS in line
with our | 40.7 estimate aided by other income (| 652 crore vs. our
| 479 estimate) and offset by higher tax rates relative to estimate.
V a l u a t i o n
We expect FY13E US$ revenues to grow 9% while rupee revenue/EPS
could grow 13.9%/9.7%, respectively. This translates to a revenue/EPS
CAGR of 15.5%/13.6% during FY11-14E. Further, we expect EBIT margins
to decline 72 bps in FY13E. We change our valuation methodology and
now value Infosys based on CY13E EPS estimate. We have valued Infosys
at 16x our CY13E EPS estimate of | 170 and maintain our BUY rating with
a revised target price of |2,720 vs. | 2,950 earlier.
No comments:
Post a Comment