BNP Paribas upgrades Infosys to 'buy' ahead of earnings

Says company may raise its FY14 dollar revenue growth guidance

BNP Paribas upgraded Infosys to "buy" from "hold" and raised its target price to Rs 3,550 from Rs 2,450 ahead of the company's September-quarter earnings on Friday.

"Despite Infosys's recent struggles, we believe an uptick in demand, renewed focus on traditional service lines and cost initiatives will lead to revenue growth stabilising and currently depressed quarterly margins recovering. This in turn should lead the stock to re-rate," BNP said in a note.

BNP adds there is improvement in the core markets of Infosys and it may raise its FY14 dollar revenue growth guidance in the second-quarter results.

Infosys shares rose just 0.3% in the previous week, underperforming the BSE benchmark for IT sector which rose 2.4% in the same period.

 

Infosys shares are up 0.13% at 10:49 am.