Infosys Guidance for FY2008-09

We have obtained the Guidance given by the Management of Infosys Technologies for FY2008-09.

  • For Q1 ending June-30, Income is expected to be Rs 4570 crore – YoY growth of 21%
  • EPS is expected to be Rs 20.7, growth of mere 15.2% compared to same quarter previous year
  • For the full year Income is expected to be Rs 20,000 crore a 20% growth YoY
  • For the full year, EPS is expected to be Rs 92.32 a YoY growth of just 16.3%, which is very disappointing in our opinion

As Infosys continues to add huge Labor without significant increase in any technological innovation, the company’s performance is expected to be lackluster. We believe in Cash Flow and not Real Estate assets accumulated by the company threatening various state Governments to pull out of their state. Every rise in the stock should be considered as an opportunity to Exit and enter other growth stories.

Slower GDP Growth Inevitable – Goldman Sachs

WPI inflation continued to accelerate to 7.41% yoy in the week ending March 29, from 7% yoy in the previous week. Inflation is now at its highest level since November 2004, and significantly above the Reserve Bank of India’s (RBI) comfort ceiling of 5%.Minerals prices hastened by 42%, while basic metals rose 20% respectively yoy, reflecting a one-time upward adjustment to WPI prices which have been running up for several months.

Goldman Sachs expects RBI to increase the repo rate by 50 bp in its April policy meeting to primarily arrest inflationary expectations and second round effects. The central bank will encourage further INR appreciation. (more…)

Lehman Upgrades HDFC to Overweight

Struggling American FII, Lehman Brothers Equity Research has upgraded Asia’s best housing finance company HDFC to Overweight from Equal weight. Lehman in the note said, Because of its highly stable business model, HDFC has historically been a good opportunity in times of heightened risk perception. This will continue to be the case this time as well. However, in the past two weeks, the stock has corrected by 13%, which we believe provides an attractive entry opportunity. (more…)

Punj Lloyd bags Rs 1864 crore order

Punj Lloyd Ltd has informed us that the Company and its subsidiary Punj Lloyd Pte Ltd., Singapore have been awarded projects worth Rs 18640 million.

Sembawang Infrastructure (India) Pvt Ltd (a subsidiary of Sembawang Engineers and Constructors Pte Ltd, Singapore) has been awarded projects worth Rs 970 million.

With the award of above projects, the order backlog for Punj Lloyd Group is Rs 214,092 million. This is the total value of unexecuted orders as on January 01, 2008 and new orders received till date.

Sasken to consider buyback

Sasken Communication Technologies has informed the us that the Board of Directors of the company (scheduled to meet on April 18, 2008) will also consider a proposal for buyback of equity shares. This could be a near-term trigger for the stock after a huge under performance of ~50% (against BSE IT index) in the last three months, but our fundamental concerns remain intact.

Citigroup Analyst in a report said,

Sasken’s services business has been significantly impacted by rupee and client-specific challenges, while its products business has gone through challenging times (with no respite in sight). The stock trades close to our target price, and any
move up would provide a more attractive opportunity to sell the stock.

They have a target price of Rs 138 with a SELL High Risk rating on the stock.

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