UPDATE 1-Infosys shares hit record high ahead of earnings

* Earnings optimism pushes shares up nearly 2 pct

* Analysts expect Infosys to raise FY11 f’cast on Tuesday
(Adds details, analyst comments, changes dateline from Mumbai)

By Bharghavi Nagaraju

BANGALORE, July 9 (BestGrowthStock) – Shares in Infosys
Technologies (INFY.BO: ), India’s second-largest outsourcer, rose
almost 2 percent on Friday to a record high on optimism about
quarterly earnings next week.

“Infosys is expected to outperform its forecast and upgrade
its full-year outlook; plus it is good fundamentally,” said
Harit Shah, IT analyst with domestic brokerage Karvy Stock
Broking.

By 10:41 a.m. (0511 GMT), Infosys was up 1.5 percent at
2,869.40 after hitting 2,879.90, outpacing a 1 percent rise in
the main stock index (.BSESN: ).

Most analysts expect Infosys, which reports June quarter
results on Tuesday, to raise its revenue growth guidance in
dollar terms for 2010/11 to 17-19 percent from 16-18 percent
given in April.

“We expect robust results from Tier 1 IT vendors to
demonstrate the underlying demand strength,” Macquarie said in
a note.

Analysts expect the rupee’s 3.3 percent fall against the
U.S. dollar in the June quarter to partially offset the impact
of salary hikes and euro volatility for exporters such as
Infosys, which generates more than half its sales from the
United States.

Shares in Infosys, which has a market value of about $35
billion, currently trade at a price to earnings multiple of
25-27, according to calculation by Reuters.

“The valuation is expensive,” said Shah, who has a ‘market
performer’ rating on the stock with a 12-month target of 3,025
rupees.
(Additional reporting by Ami Shah in MUMBAI; Editing by Ranjit
Gangadharanan)

UPDATE 1-Infosys shares hit record high ahead of earnings