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Infosys Q3 Excites Analysts, Targets Raised

Infosys shares edged up on Monday, following a 5 per cent jump on Friday, as December quarter earnings impressed analysts. The stock was the top Nifty gainer in early trade.
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Infosys Q3 Excites Analysts, Targets Raised

Infosys shares edged up on Monday, following a 5 per cent jump on Friday, as December quarter earnings impressed analysts. The stock was the top Nifty gainer in early trade.

Three big global brokerages have upped their targets on Infosys post Q3 earnings announcement. Macquarie raised its target on Infosys to Rs 2,050 from Rs 1,850, while Bank of America Merrill Lynch increased its target to Rs 2,350 from Rs 2,250. Credit Suisse's new target is Rs 2,125 against previous target of Rs 2,075.

Infosys surprised investors by sticking to its full-year sales target and reported a volume growth of 4.2 per cent, which is a 3-year high. Infosys said it was also using its workforce more efficiently, with an utilisation rate of 82.7 per cent excluding trainees, its highest in 11 years. (Read full story here)

Infosys also reported a sequential growth in operating margins, which stood at 26.7 per cent in the December quarter. Analysts said the rise in margins was on account of lower bad debt provisioning.

TS Harihar of HRBV Client Solutions told NDTV that Infosys is inching close to TCS as far as margins are concerned. "It looks a good bet," he added.

Kawaljeet Saluja of Kotak Institutional Equities told NDTV that the result quality of Infosys was "pretty good and impressive".

"The company is doing well in a lot of areas, which gives you comfort about acceleration in growth," he added. Kotak has an "add" rating on Infosys with a target of Rs 2,350.

The new steps that CEO Vishal Sikka is taking will have a positive impact on attrition rate at Infosys, Mr Harihar added.

Attrition, or the number of people leaving or retiring, fell in absolute terms to 8,900 employees in the third quarter from 10,100 in the quarter before.

On Friday, Infosys had announced 100 per cent variable bonus payout for employees for the December quarter in a bid to contain rising attrition. (Read)

As of 10.10 a.m., Infosys shares traded 0.15 per cent higher at Rs 2,077. The stock outperformed the IT sub-index on the BSE, which dipped lower tracking gains in the rupee.



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