Infosys Ltd. share price target

3QFY18 CC revenue growth of 0.8% QoQ was largely in line with our estimate of +1% QoQ. Led by higher furloughs, budget cuts and delayed ramp-ups, a 1.6% QoQ fall in BFS was in contrast to 2QFY18 commentary. However, a pick-up in the vertical starting next quarter, and expectations of a better CY18 v/s CY17 put worries to rest. EBIT margin of 24.3% (+10bp QoQ)exhibited stability, despite wage hikes for mid/senior management. Strong execution over last three quarters was driven by improved utilization, which at 85% is at its all-time high. With little juice left to squeeze out from this lever, INFO has moved its focus on improving onsite/offshore mix and roll ratios onsite, and fresher hiring onsite to support its cost structure. INFO still maintained guidance of 23-25% EBIT margin.

INFO will reverse tax provisions of ~USD225m that were made in the previous period and are no longer required. This is the P&L impact and will be seen in3QFY18 earnings, driving EPS higher by INR6.7 (10.4% on FY18E base). INFO is expected to pay out USD233m due to the differences in payable taxes for the prior period and actual taxes paid. This is the cash flow impact that will play out over the next few quarters (exact period not specified). INFO's overall effective tax rate is expected to decline by 100bp up till FY21 as a consequence of the agreement. This drives a marginal upgrade of 1.4% to our future earnings estimates

Standalone attrition declined to 15.8% from 17.2% in Q2 18. Signing of the Advance Pricing Agreement (APA) with the US Internal Revenue Service: Infosys has concluded an Advance Pricing Agreement (APA) with the U.S. Internal Revenue Service (IRS). Under the APA, Infosys and the IRS have agreed on the methodology to allocate revenues and compute the taxable income of the Company's U.S. operations. This agreement covers financial years from 2011 to 2021. The APA will enhance predictability of Infosys' tax obligations in respect of its U.S....

Infosys has appointed Mr. Salil S Parekh as CEO and MD effective January 2, 2018 for a period of 5 years. He would be based out of Bengaluru (India). Also, Mr. UB Pravin Rao would be redesignated as COO and whole-time Director with effect from January 2, 2018.

Infosys has appointed Salil Parekh as its new CEO and MD for a period of 5 years, effective Jan'18. Infosys has opted for another external CEO as against many of Infosys' existing and alumni names that were seen as possible contenders. Mr Parekh was a member of Capgemini's Group Executive Board and was handling business size and diversity (IT Services versus Software in case of Vishal Sikka), similar to what he will now be entrusted to do at Infosys. This would mean quick actions but largely in execution and client interaction areas. However, this may also mean a step back on some software-defined approaches envisaged by Mr Sikka....

Infosys has announced the appointment of Salil S Parekh as CEO and MD of the company for five years effective January 2, 2018. Simultaneously, UB Pravin Rao would be re-designated as COO and Whole Time Director and would step down as interim CEO and MD. Mr Parekh has rich experience of 25 years with Capgemini (~$15-billion revenue company with head count of ~1,90,000 employees). Mr Parekh, who had been a member of Capgemini's group executive board (equivalent to a deputy CEO's post), brings rich global exposure with a strong client relationship...

Infosys announced over the weekend that its Board of Directors has appointed Salil S. Parekh as Chief Executive Officer and Managing Director (CEO & MD) of the Company effective January 2, 2018. Mr. Parekh joins Infosys from Capgemini where he was a member of the Group Executive Board. Mr. U B Pravin Rao will step down as the interim CEO and Managing Director effective January 2, 2018 and will continue as Chief Operating Officer and a...

Despite leadership changes, Infosys Q2 revenue was in line with expectation. EBIT margin (24%; up 10 bps QoQ) was better driven by efficiencies which offset wage increases during the quarter.

INFO secured large deals worth US$731mn vs. US$657mn in Q1, US$25mn+ clients grew by 3 QoQ to 100 and US$100mn+ clients increased by 1 QoQ to 19. New services and products (11% of revenue) continued outperform and grew by 14.3% QoQ and contributed ~50% of incremental revenue in Q2FY18. Strategic roadmap reaffirmed Strong focus on software enabled services INFO confirmed that it will continue to focus on creating strategic differentiation through focus on design, consulting and technology services, enabled by software. We believe that reaffirmation of the strategic roadmap is positive as it means that no...

In dollar terms, revenue for the IT major rose 2.9 per cent sequentially, while the revenue growth was 5.4 per cent QoQ on constant currency terms. Industry wise, the company reoprted 2 per cent sequential growth each in financial services and insurance and Hi-tech segment. Growth for ECS segment rose 3.9 per cent QoQ, while that of RCL segment stood at 2.6 per cent. Geography-wise, Europe reported 6.6 per cent growth, followed by India (5.2 per cent), Rest of the world (2.9 per cent) and North America (2 per cent). The software firm has added 72 clients (gross basis) during the quarter and active clients were...