Kotak Securities analysts recommend you to ACCUMULATE INFOSYS

Kotak Securities analysts recommend you to ACCUMULATE INFOSYS with a PRICE TARGET of Rs.2498, current market price for the stock is – 2386.

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Small brief on Infosys Technologies Ltd

• 2QFY13 numbers came in below estimates. While revenue growth was largely in line, margins disappointed. Conservative provisioning and lower product revenues impacted margins.
• Infosys has been disappointing on revenues / margins for past few quarters due to company-specific issues, in the backdrop of an uncertain macro.
• We reduce our earnings estimates. We accord valuations which are at the lower end of the valuations band of previous low-growth phase (FY10), as recovery is still uncertain and may be gradual.
• Infosys is giving continued importance to high quality business and this should yield results in the long term. We remain structurally positive on the stock over this time frame.
• We expect that, the stock will remain range-bound in the near term, because of no near-term triggers. Any fall should be utilized to buy the stock.
• We maintain ACCUMULATE with a PT Rs.2498, based on FY14 earnings estimates.

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