Needham & Company Reiterates Hold on Infosys Limited (INFY) Following 2Q Results

Needham & Company reiterated a Hold rating on Infosys Technologies (NYSE: INFY) following the company's 2Q earnings results. Revenue rose 6% Q/Q and 8.7% Y/Y to $2,392 million, above consensus of $2,334 million. Management reduced FY16 revenue guidance to 6.4-8.4% from 7.2-9.2% Y/Y growth, reflecting currency headwinds.

Analyst Mayank Tandon commented, "Infosys posted decent 2Q results, easing past Street estimates on both the top and bottom-line. Volume growth was healthy, reflecting broad-based growth trends across regions, verticals, and services. Management left the constant currency growth guidance unchanged at 10-12% for FY16, but lowered the reported revenue guidance range to reflect currency pressures. While we believe INFY's competitive position is improving and the investments in emerging technologies should pay off long-term, we believe growth is likely to continue to be lumpy and lag its largecap peers. With the stock trading at 16x ex-cash our FY17 EPS estimate, we believe the stock is fairly valued based on INFY’s subdued EPS growth prospects. We maintain our HOLD rating."

For an analyst ratings summary and ratings history on Infosys Technologies click here. For more ratings news on Infosys Technologies click here.

Shares of Infosys Technologies closed at $19.15 yesterday.

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