Infosys Technologies Ltd - PINC Visit Note

PINC Research met the management of Infosys recently to identify the strength in demand environment and its sustainability going forward.

* Near term demand visibility is strong
* Pricing stable, not likely to increase in 2-3 quarters
* Cloud computing
* Hiring commenced for next year
* Attrition is going down
* Utilisation has peaked

Stronger recovery in the global macro economic environment will happen over a period of time. Higher investments in IT by large clients and the diversified portfolio of services of large Indian IT vendors will help them to grow faster than mid tier IT vendors. We therefore believe that the large caps will outperform mid-caps in the near term.

Infosys is currently trading at 25.8x and 21.1x FY11E and FY12E earnings respectively. We maintain 'BUY' on the stock with a target price of Rs3,500 based on 23x FY12E earnings.

Source : Equity Bulls

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