Infosys Ltd.

July 2, 2015 . Equities Desk

Established in 1981, Infosys Ltd. is amongst the global leaders in consulting, technology, and outsourcing and next-generation services. It has market offerings spanning across more than 50 countries and 20+ industries. As in March 2015, the company had revenues worth `53,319 crore. It has a workforce of 176,000+ people. Globally, it has ~85 sales and marketing offices and 100 development centers.

Valuation and view

Infosys intends to gain its status as the bellwether stock in coming few years. It has set forth a ‘Five Year Vision’ of reaching revenues worth US$ 20 bn by 2020. To retain the confidence of the investors in its earnings visibility, the company is focusing on transforming its legacy business model to segmented and more specific model assigning need based solutions applying cloud computing, artificial intelligence and leveraging on capacities arising from exclusivity of new and old companies via funding and acquisitions. We expect the company’s effort to provide it an edge against competition.

At a current market price (CMP) of Rs995, the stock trades at a P/E of 16.6x FY16E and 14.9x FY17E. We recommend ‘BUY’ with a target price of Rs 1,167, which implies potential upside of ~17% to the CMP from long term perspective.

Research Report Infosys Ltd

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