In­fosys Likely to Hit ₹ 1,400 in 12 Months; Buy on Ev­ery Fall

IT ma­jor’s stock set to re-en­ter life­time high ter­ri­tory

The Economic Times - - Disruption: -

Mum­bai: Go­ing by the 8% jump in In­fosys’ Amer­i­can De­posi­tary Re­ceipts on Fri­day, shares of the IT ma­jor are set to see a gap-up open­ing to­day due to its up­beat rev­enue guid­ance and the in­crease in tar­get price by sev­eral lead­ing bro­ker­ages in the range of 0.8% to 9.6%. A jump of 8% would im­ply that the stock would open around ₹ 1,270 lev­els, a new life-time high.

“Fun­da­men­tally, In­fosys is grow­ing faster than the in­dus­try av­er­age. It is the bell­wether now for in­vest­ing in In­dia,” Dipen Sheth, head - in­sti­tu­tional re­search at HDFC Se­cu­ri­ties, said in an in­ter­view with ET Now and main­tains a 12-month tar­get price of ₹ 1,400.

In­dian mar­kets were shut on Fri­day, when the com­pany re­ported strong op­er­at­ing mar­gin per­for­mance for the March quar­ter and guided for above in­dus­try rev­enue growth. In­fosys ex­pects its dol­lar de­nom­i­nated rev­enue to grow 11.8-13.8% for FY17.

“From the re­turns point of view, the stock will be a mar­ket per­former but rel­a­tive to the large-cap IT peers, we have seen In­fosys turn around and see much im­prove­ment in per­for­mance in the last few quar­ters. It is now re­gain­ing its mojo and it would be our top pick in the large-cap IT space,” said Amar Am­bani, head of re­search at IIFL.

As in­vestors get more con­fi­dent about In­fosys’ fu­ture prospects, the stock is likely to wit­ness a PE mul­ti­ple re-rat­ing, Sa­gar Ras­togi, re­search an­a­lyst at Am­bit Cap­i­tal said. “The the­sis that the com­pany will keep ac­cel­er­at­ing rev­enue growth with­out com­pro­mis­ing on mar­gins or cash flows is bear­ing fruit. It is at a slight dis­count to TCS but that should close go­ing ahead,” he said. Ras­togi has a ‘buy’ rat­ing with a tar­get price of ₹ 1,450 on In­fosys.

April month op­tions data for In­fosys shows con­cen­tra­tion of open in­ter­est at

₹ 1,200-1,300 strikes among call op­tions. An­a­lysts be­lieve the stock is likely to face im­me­di­ate hur­dle near ₹ 1,300.

On April 4, the stock touched a life high of ₹ 1,248. It has fallen nearly 6% since, and ended at ₹ 1,176 on Wed­nes­day. “The stock has cor­rected from its life­time highs touched cou­ple of days ago but the ma­jor trend is pos­i­tive. We have seen fresh put writ­ing at ₹ 1,100-1,120 strikes and be­cause of that down­side seems to be limited,” said Chandan Ta­paria, an­a­lyst at Anand Rathi Fi­nan­cial Ser­vices.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.