Infosys - Picks up momentum on revenues; margins to follow - Kotak

Infosys' aggressive turf protection is beginning to pay off as it delivered strong revenue growth even though it was at the expense of pricing. Infosys is running an inefficient ship which it intends to correct and is better-positioned than peers to protect profitability after absorbing the near-term impact of wage hikes and low upfront-margin new deals. Marginal change in revenue estimates and Re/USD rates drives 2-6% increase in our FY2014-15E EPS estimates.

Within our Cautious sector view, we retain ADD rating on Infosys noting turnaround and multiple re-rating potential. We raise our TP to Rs3,050 from Rs2,750 earlier.

Source : Equity Bulls

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