Fairval

Notes on Indian equities, sectors and economy

Infosys valuations steadily sliding

Posted by fairval on April 16, 2012

Infy valautions have now come down to about 14x FY13x eps (Rs 160-170 range).

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This is now lower than TCS and Wipro.

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The question is – whether the structural change the IT services business, and more so Infy, is going through, is over. One repeatedly hears that the days of 30% plus EBITDA margin are over. 20-25% is more sustainable for IT Services. Infy is a long way away from there. Even TVS is around 29%.

So Infy may not be quite have reached the bottom of the trough yet. Though, rupee can save it for sometime, if it dives below Rs 55 in 2012.

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