Shares of Infosys fell over 3 per cent in Mondays trade following its September quarter results, as brokerages expect upside on the stock, if any, will be limited.Foreign brokerage Citi maintained its buy call on the stock with a target at Rs 900.
The brokerage said that recent returns in the stock may cap near term upside.Citi said the stock was a big overweight in its India model portfolio.
It added that Infosys positioning was as a defensive stock.In constant currency terms, Infosys reported 3.3 per cent quarter-on-quarter (QoQ) rise in revenues at $3.21 billion, marginally missing street expectations.Net profit rose 6.2 per cent sequentially to $572 million.
In rupee terms, Infosys reported a drop in net profits by 1.8 per cent to Rs 4,037 crore over the corresponding quarter last year while revenue grew 10 per cent to Rs 22,649 crore.
The second-largest domestic IT firm has maintained the upper end of the revenue guidance.Credit Suisse said that IT majors margins fared better, even as the revenues missed expectations, slightly.The margins offer some comfort in the light of a below-expectation Q2 show by TCS, the brokerage said, while maintaining its underweight call on the stock.
The brokerage has a target of Rs 690 on Infosys.Domestic brokerage, Reliance Securities said despite a decent quarterly performance, a clear-cut cautious outlook for financial services vertical owing to a lower interest rate regime (negative in some cases) in developed markets, and subdued retail performance are negative factors clouding its near-term outlook.Rolling over our estimates to FY22E, we maintain our hold recommendation on the stock with a revised target price of Rs 875 (from Rs 790 earlier), valuing it at 20 times average of FY21 and FY22 EPS, it added.At 10 am, the stock was trading at Rs 793.20 down 2.76 per cent.