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Infosys Technologies – Outperformer says ICICI

April 19, 2007

ICICI Research has put an outperform rating on Infosys Technologies. Infy reported a 3.2% growth in top line to Rs 3,772 (our estimates: Rs 3,860 crore) and a 16.4% growth in bottom line to Rs 1144 crore (Rs 1,005 crore) as compared to the previous quarter. The fourth quarter has historically been a sluggish for Infosys. This time the company was impacted by a strong rupee (173bps impact during the quarter) and compensated by higher other income (no gain from hedges during current quarter: higher income from dividend and mutual funds).

The larger growth in bottom line was on account of a write-back of tax provisions to the extent of Rs 124 crore and higher other income at Rs 119 crore. However, the management reiterated its view of a strong business environment highlighting a 16.31% growth of the top 5 clients during the quarter. The company’s dollar guidance for FY08 revenues was also quite positive indicating a 28% to 30% year-on-year growth. ICICI maintains OUTPERFORMER rating on the stock with a price target to Rs 2,718 over a 15-18 month. Read the report here.

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