UPDATE: IDBI Capital Upgrades Infosys to Hold on Strong Q3 Results

IDBI Capital upgraded Infosys Limited

from Reduce to Hold. IDBI Capital said, "As per the management, initial read on CY13 IT budgets (expected to close by Feb) are likely to be flat to marginally down. However, better Q3 and timely ramp up in deals won in past few quarters has led US$ revenue growth to 6.5%/12.6% for FY13/FY14 (requires ask rate of around 2% in 4 qtrs of FY14). Further, EPS est. is revised upwards by 3.3%/5.8% to Rs163/Rs175 for FY13/FY14 incorporating US$8 mn per quarter charge due to Lodestone and currency reset to Rs54.5 (v/s Rs53 in Q2). We value Infosys at 15x FY14 EPS (15% discount to TCS's target multiple of 17x) with a revised TP of Rs2,630 (Rs2,200 earlier) hence we upgrade our rating to HOLD from REDUCE earlier." Infosys closed at $43.95 on Friday.