recently assigned overweight rating on the stock, citing upside on margin, focus on its “bread and butter ADM (Application Development and Maintenance) business, relative stability in management in the future and inexpensive valuations.
For most part of the last two years, the stock has traded at a steep discount to TCS valuations. Even after gaining 50% in 2013, Infosys traded at 19 times its FY14 expected earnings while TCS traded at an earning multiple of 24, as on Thursday.
As per Credit Suisse, although Infosys is the most debated stock getting into 2014, the brokerage house is not constructive due to concerns on some of the “softer”management issue.
Ambit Capital maintains “sell” rating and believes Infosys will continue to lack a clear strategy and market appears to have discounted a turnaround in Infosys after return of founder Narayana Murthy as the executive chairman.