Infy may not be able to repeat volume growth in Q3: Deven Choksey

SmartInvestor's Jinsy Mathew spoke with Deven Choksey, MD & CEO, K R Choksey Shares and Securities on his interpretation of the numbers in an exclusive chat. He also replied to investor's queries in this LIVE chat.

Infosys surprised the Street with the traction in the large deals segment that helped the top-line grow by 3.8% in dollar terms sequentially to $2.06 billion. SmartInvestor's Jinsy Mathew spoke with Deven Choksey, MD & CEO, K R Choksey Shares and Securities on his interpretation of the numbers in an exclusive chat. He also replied to investor’s queries in this LIVE chat. Excerpts:

SmartInvestor: What are your key takeaways from Infosys results? Is the worst over?

Deven Choksey: There was Positive suprise on revenue front. Upgrade in FY14 guidance was in line with expectation.

Deven Choksey: It seems worst is over considering strong performance in Q2

SmartInvestor: Do you think Infosys will be able to maintain volume growth in the next two quarters in FY14?

Deven Choksey: Tpyically Q3 and Q4 are relatively soft quarters; hence it is unlikey Q2 performance would be repeated

SmartInvestor: Over the last two quarters Infosys has done well. Do you consider that the company has re-entered a growth phase?

Deven Choksey: Yes we believe so

SmartInvestor: How do you see the US shutdown affecting the IT companies?

Deven Choksey: It is too early to comment on it. However, so far no major impact on Indian IT companies

SmartInvestor:  Do you see valuation gap between Infy and TCS closing in the near term?

SmartInvestor:  Sanjeev asks:  Sir, is there any chance of Infosys stock-split soon?

Deven Choksey: We believe, upside in stock price will be primarily led by earning upgrade cycle atleast in near term. And if the company consistently performs in line with peer sets than valuation upgrade cycle will follow.

SmartInvestor:  Sir, people say that rupee fall helps IT companies. So if rupee falls again, what IT stocks I buy?

Deven Choksey: We are positive on HCL technologies.

Deven Choksey: No announcement from Infy on stock split

SmartInvestor: Harpal asks:  I bought Infy at Rs 2670. Should I exit and buy TCS now?

Deven Choksey: We continue to be positive on Infosys over TCS

SmartInvestor: Would up revise your rating and price targets for Infosys post this set of numbers?

Deven Choksey: We will wait for earnings call to revise our target price and earnings

Stock Maniac: If Rupee appreciates to 58-59 levels what could be the possible impact on Infy margins

Deven Choksey: If rupee appreciates it can have an impact on short term margins; however we believe company would recover margins on long term basis

pratha: I bought 20 Infosys at 2,941/sh and I can hold for another 1 yr. What should I do now?

Deven Choksey: We maintain our Accumulate rating on Infosys

SmartInvestor: Ravi from Mumbai asks:  The company has $4 billion in its coffers. Do you think another acquisition could be on the cards?

Deven Choksey: We believe Infy could acquire companies on right valuation and not aggressive valuations.

Sachin Chatterjee: Sir, do you think changes in top management will affect the company's business?

Deven Choksey: The company has strong management band with and hence exit of some senior managers wont have impact on the company's performance

punter: Why is the company silent regarding succession planning? It is surprising Mr Narayana Murthy has kept silent on this. What is your outlook on this issue?

Deven Choksey: It is company's internal policy

SmartInvestor: Parminder asks:  The company is seeing traction in the large deals segment. Will it be able to maintain it?

Deven Choksey: Yes we believe traction in large deal will continue

Sachin Chatterjee: There is talk of share buyback. Is that possible ?

Deven Choksey: It is very difficult to comment as it is company's internal policy

Sachin Chatterjee: Do you think Infosys can run upto 3500 levels in short term?

pratha: What is your view on Mphasis. Can I buy now?

Deven Choksey: We have sell rating on Mphasis

SmartInvestor: Final question:  What is your outlook for the markets and what are your top buys and sells in the current market condition?

Deven Choksey: We have positive view on market and recommend buy on dips

Deven Choksey: Our top picks are HCL Tech, Glenmark, Adani Port

SmartInvestor: Thanks Deven for your time and advice

SmartInvestor: Thank you all for participating in the chat.