Infosys out-performed both its IFRS and Indian GAAP guidance on the revenues and net profit fronts. It recorded a 2.1% q-o-q jump in its 2QFY2010 top-line in Rupee terms (3.1% y-o-y growth).
As per IFRS, the company registered a 2.9% sequential growth in Dollar Revenues (5% y-o-y de-growth), while in constant currency terms, the company clocked a 1.2% q-o-q growth (3.2% y-o-y de-growth).
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Infosys witnessed a 47bp q-o-q expansion in EBIDTA margins to 34.6%, with 20bp improvement attributed to crosscurrency movements and the balance to strong volumes with offshore shift.
Pricing increased marginally on a sequential basis, due to the cross-currency benefits. The net profit growth during the quarter was restricted to a 0.9% q-o-q rise for Infosys, which was primarily on account of lower interest income.
At the CMP of Rs2,178, the stock is trading at 19x its FY2011E EPS. We recommend an ACCUMULATE on the stock, with a target price of Rs2,475.