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Infosys Technologies - Stock Update

Infosys Technologies - Results update.
Infosys reported strong performance for the June 2009 quarter, exceeding market expectations and that of consensus in terms of revenue, EBITDA and net income.

Infosys'FY2010E EPS guidance reduced to Rs96 from Rs101.2 earlier (Re/US$ now 47.9
Infosys has reduced FY2010E EPS guidance to Rs94.6-96, versus Rs96.7-101.2 earlier. This decline is lead by (1) revision in Re/US$ rate to Rs47.9 versus Rs50.72 earlier and (2) increase in tax rate assumption to 19-20% versus 16.5-17% earlier— the company is attributing this to slower-than-expected ramp up from SEZs.

The FY2010E guidance given by the company is excessively conservative and leaves room for significant outperformance. Improvement in decision making, lower project cancellations, and new deal wins will drive growth and positive surprises over the next 12-month. Long term investors can buy Infosys on declines with a price target of Rs.1750.