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Actionable news in INFY: INFOSYS TECHNOLOGIES LIMITED AMERICAN DEPOSITARY SHARES,

Infosys Management Expects Q1 To Be Volatile; Stock Down By 6%; Accumulate Around $17±0.5

Summary

Infosys chief operating officer lowered its Q1 margin guidance by 200 bps mainly on the back of higher visa and compensation costs. However, FY17 revenue guidance remains intact.

Infosys’ strategy to focus on automation and artificial intelligence; improve its utilisation levels, gaining higher win rates and reducing its attrition rates will benefit the company.

I would recommend to buy around $17±$17.5 for good capital appreciation.

Infosys (NYSE:INFY) chief operating officer (NYSE:COO) UB Pravin Rao lowered its Q1 margin guidance by 200 bps mainly on the back of higher visa and compensation costs. However, the COO said he was confident of meeting its FY2017 revenue growth guidance of 11.5%-13.5%. He Rao told investors that overall demand remains "volatile" and weaker spending in the energy and insurance sector will weigh on the company's performance over the next few quarters. He also highlighted on the ongoing slowdown of its enterprise resource planning (ERP) and business process outsourcing (BPO) businesses, and said that the company was working to turn around those businesses. The retail sector performance also remained soft last few quarters especially across the US and Europe.

Mr Rao says commoditisation has taken place in the industry; the management is betting on automation and artificial intelligence platform to counter balance this...


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