Views on Infosys Limited 1QFY2017 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research- IT, Angel Broking) on Infosys Limited 1QFY2017 Results:

Infosys (CMP: INR 1,176/ TP: INR 1,374/Upside: 16.8%)

"Infosys posted numbers lower than expected the company posted a 2.2% sequential growth in USD revenues to US$2,501mn V/s US$2,548mn expected, mostly volume lead. In rupee terms, revenues came in at INR 16,782cr V/s INR 17,072cr expected, up 1.4% QoQ. On Constant Currency (CC) terms, the company posted a 1.7% QoQ growth in the sales front. In terms of geographies, USA posted a CC QoQ growth of 2.4%, Europe a CC QoQ growth of 0.3%, ROW a CC QoQ growth of 4.9%, while India dipped CC QoQ 8.2% during the quarter. In terms of verticals, FSI posted a CC QoQ growth of 1.7%, MFG & Hi-Tech CC QoQ growth of 2.4%, RCL CC QoQ growth of 0.7% and ECS CC QoQ growth of 2.4%.

On the operating front, EBDITA and EBIT margins dipped by ~121bp QoQ bps and ~138bps QoQ respectively to end the period at 26.5% and 24.1% respectively. Consequently, PAT is expected to be at INR 3436cr V/s INR 3,514cr, QoQ de-growth of 4.5%. In terms of operating matrix, the utilization levels (excluding trainee) were 80.5% V/s 80.1% in 4QFY2016, while the attrition was 15.8% V/s 12.6% in 4QFY2016 (mainly attributed to seasonality).In client addition, 3 clients have been added to US $100mn + category taking total count to 17. In terms, of guidance the FY2017 revenue guidance revised to 10.5%-12.0% in constant currency (CC). We maintain our BUY rating on the stock with a target price of INR 1,374."

Shares of INFOSYS LTD. was last trading in BSE at Rs.1073.95 as compared to the previous close of Rs. 1079.2. The total number of shares traded during the day was 240309 in over 5846 trades.

The stock hit an intraday high of Rs. 1078 and intraday low of 1067. The net turnover during the day was Rs. 257876369.

Source : Equity Bulls

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