PSEC - Infosys Technologies

P-Sec report on Infosys Technologies:

This shall be one of the tough AMJ quarter for Infosys. We are revising are Rs/USD assumption to Rs 42.5 for FY08 and FY09 estimates. We are expecting operating revenues of Rs 39313 million, a q-o-q growth of 4.22% and y-o-y growth of 30.4%. However in USD terms we are estimating revenues of USD 925 million ( 7.2% q-o-q, 40.2% y-o-y) We are expecting a q-o-q margin erosion of 244 bps this quarter reflecting the impact of rupee appreciation, Salary hikes, visa expenses. Infosys has only 3.2% of the balance sheet size in the form of debtors & balance in foreign bank a/c. Hence, shall have lesser impact of mark to market of monetary assets. We continue to recommend a BUY at these levels.