Buy Infosys, target of 2555: Reliance Money

Bangalore: By looking at its quarterly performance, Reliance Money has recommended a buy rating on Infosys with a price target of 2555. According to the brokerage firm, during the quarter the whole Indian IT sector witnessed a stupendous run on the bourses and Infosys being the torchbearer of the sector appreciated by almost 40 percent during the quarter to touch a high of 2414.

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Reliance Money believes that the recent appreciation was more to do with the market sentiments and liquidity than any overnight improvement in the sector fundamentals. Nevertheless, the sector's headwinds are clearly bottoming out and it is more likely that the upward trend will continue in the financial year 2011 (FY11). Infosys recently announced its quarterly results, which beat the market expectations.

The IT bellwether posted a 7.54 percent growth in consolidated net profit of 1,540 crore in the last quarter. The company also raised its full year revenue forecast, by instilling confidence in the future market conditions. With the recommended target price of 2555, if the stock is bought at Monday's closing price of 2,178.35, the percentage of gain would be 17.29 percent.