CLSA cuts target price on Infosys by 7%
MUMBAI: CLSA has slashed target price on Infosys' shares by 7% to Rs 990 following the company's March quarter earnings announcement on Thursday.
The company's guidance for the current financial year implies further slowdown in growth, the brokerage said.
"FY18 guidance is uninspiring at 6.5-8.5%, suggesting further growth slowdown from FY17. While margin management and cash conversion were positive, it is difficult to overlook its anaemic growth trajectory," said CLSA, reiterating 'underperform' rating on the stock.
"We feel Infosys needs to reappraise its growth strategy to maintain market relevance and win back shareholders' confidence," it added.
Infosys' shares fell 3.9% to close at Rs 931.40 on the BSE on Friday.
'While announcement of a one-time buyback/dividend up to $2 bn (billion) is a positive, long-term payout ratios at 70% FCF (free cash flow) aren’t a dramatic improvement," said CLSA.
A buyback announcement is likely to boost the stock only in the near-term, the brokerage said.
The company's guidance for the current financial year implies further slowdown in growth, the brokerage said.
"FY18 guidance is uninspiring at 6.5-8.5%, suggesting further growth slowdown from FY17. While margin management and cash conversion were positive, it is difficult to overlook its anaemic growth trajectory," said CLSA, reiterating 'underperform' rating on the stock.
"We feel Infosys needs to reappraise its growth strategy to maintain market relevance and win back shareholders' confidence," it added.
Infosys' shares fell 3.9% to close at Rs 931.40 on the BSE on Friday.
'While announcement of a one-time buyback/dividend up to $2 bn (billion) is a positive, long-term payout ratios at 70% FCF (free cash flow) aren’t a dramatic improvement," said CLSA.
A buyback announcement is likely to boost the stock only in the near-term, the brokerage said.
