Revenues, R&D make Infosys a strong stock: Daiwa Capital Markets

The PE multiple for Infosys Technologies based on FY11 estimates is about 20+, 20+ is expensive. If I look at FY12 estimates also, it is about 20. Why do you think it is cheap?

Puneet Shrivastave: No. If you see the broad three reasons, the pricing power is obviously strong in the sector, if you see the top tier 3 companies. Secondly the revenues sequentially are expected to grow by 5-6%. That is also remaining on the strong side and then there are projects coming in, especially from the R&D side, that is making a difference.

Valuations obviously would always look expensive compared to other sectors, you cannot really obviously compare with some of the other sectors but the growth outlook is strong and overall environment looks good, especially on the BFSI side with some of the regulatory laws coming in US, which could actually ask a lot of these banks to renew their investment style on the IT side.