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UBS has raised the price target on India's second-largest software services exporter, Infosys Ltd, to Rs 865 from Rs 737.50. It has maintained “buy” rating.
“Expect revenue acceleration in FY19, driven by an easing drag from retail and a modest improvement in banking in Q2-4 FY19,” UBS analysts wrote in a note.
Market still wary of expecting meaningful medium-term revenue acceleration for Infosys, and the stock's recent rally is largely led by depreciating rupee, it says.
Attrition remains a challenge, senior management retention is key, given the loss of two business unit heads in six months. Positive contract win momentum in FY19 is likely to be a lead indicator of revenue pick-up, the brokerage says.
About 34 of 45 brokerages have rated the stock “buy” or higher, eight “hold” and three “sell” or lower; their median price target is Rs 710, Thomson Reuters Eikon data. Infosys stock had risen over 41 per cent this year as of last close.
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