Kotak Securities' analysis of Infosys Technologies

Infosys Technologies

Broking Firm: Kotak Securities
Price at the time of recommendation: Rs 1,664
Target Price: Rs 2,027

Rationale: Infosys��� management indicated there may be an impact on the reported USD numbers for the quarter (and the fiscal ) in case the exchange rate between USD and GBP/Euro remains at current levels.

This is because of the near 12% depreciation of GBP and Euro against the USD. Euro/GBP/Aus $ revenues form nearly 30% of Infosys ��� revenues. Management said the volume growth is in line with its expectations and there is no pressure on billing rates, as yet.

We believe that the macro concerns are already known and do not come as a surprise. The shortfall in USD revenues and against the USD guidance (if any) will be purely due to accounting issues. We also note that going by the same accounting, there may be no impact on the INR guidance.

We maintain our FY09 EPS estimate of Rs 96.6. We see the management and business model as being better equipped to handle the current economic slowdown and maintain our Buy rating with a target price of Rs 2,027.

Closing price on Monday, September 15, 2008: Rs 1,574