Hold Infosys Technologies - Way2Wealth

Infosys gave a disappointing result of Q1FY11. While the revenue growth was reasonable, the profitability of the company shrunk. The margins at the operational levels showed decent improvement.

However the NPMs registered a dip when compared sequentially and YoY. Currency volatility – both adverse Rupee movement and cross currency headwinds- and increased tax outgo, impacted the profits. The company also saw margin pressures build up as the company resorted to salary hike to check the record attrition seen in the last quarter.

Though the company raised its full years guidance, the drastic fall in the Europe's revenue share left a bitter taste. The immediate concerns for the company remain currency fluctuations and the European economic turmoil.

At the CMP of Rs 2796, the stock quotes at PE of 23.02x its FY11E EPS of Rs.121.45. Hold.

Source : Equity Bulls

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