Capgemini: Infosys’ Q4 FY13 results: disappointing FY14 outlook, no real read-across for Capgemini
BUY, Fair Value EUR47 (+32%)
This morning the Indian IT Services company Infosys reported Q4 FY13 results slightly above company guidance, but FY14 outlook is disappointing, with expected growth below the average expected for the Indian IT Services industry. On the back of this news, we deem Capgemini’s share price will be down, but believe there is no particular read-across for the company: 1). There is no change in the economic environment, which remains weak; 2). Infosys has company-specific issues on wage increases, pricing mix and strategic repositioning; 3). Infosys’ FY14 outlook indicates an improvement at the top-end of the revenue growth guidance range.
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