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Infosys Technologies Ltd. 09 July 2008

Update Report – 4Q 08 Results

Despite healthy fundamentals, current levels suggest restraint

Common HOLD Direct access

have calculated theto theprice
target full report
based free offactors,
on fundamental charge
using aat
Fundamental research indicates a 9% upside in the common stock over the next 6-12 months. We
weighted average of target
Stock http://www.iirgroup.com/researchoracle/viewreport/show/20254
prices obtained using DCF and comparative valuation methodologies.

Ticker: INFY.BO
Target price: INR1900.00 We downgrade the Infosys common stock from a BUY to a HOLD with a 6-12 month target price of
INR1900.00.
Current price: INR1736.60

ADR BUY The ADR is expected to appreciate by approximately 26% over the next 6-12 months as the
approximately 9 percentage point fundamental upside and the 21 percentage points upside
attributable to the anticipated appreciation of the Indian rupee against the US dollar over the same
period is offset by a 4 percentage points downside due to the depreciation in the ADR premium1.

Ticker: INFY
Target price: US$54.36 We reiterate the Infosys ADR (1 ADR = 1 common stock) a BUY with a 6-12 month target price of
US$54.36
Current price: US$43.01

Analyst: Meera Patil

Editor: Shem Pennant
Global Research Director:
Satish Betadpur, CFA
Next news due:
1Q 09 results, 11 July 2008
Investment horizon - short term actionable trading strategies
This report addresses the needs of strategic investors with a long term investment horizon of 6-12 months. If this
report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the
short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for
readers with a shorter trading horizon. These are available online only at www.researchoracle.com.

Report summary
Infosys 4Q 08 and FY 2008 results were reported in line with our expectations. The Indian rupee has
appreciated significantly against the US dollar during the course of the year, which led to the subdued
performance the Indian IT bellwether reported in FY 2008 compared to previous years. We believe
this, in addition to concerns of an adverse impact from a slowing US economy has negatively impacted
investor sentiment towards the Indian IT sector. Although the recent depreciatory trend witnessed in
the Indian rupee has resulted in an uptick in market expectations, this has yet to result in
improvement in volumes. Infosys’ fundamentals remain strong, aided by a healthy demand and pricing
environment coupled with inherent business levers such as utilization, scale benefits, offshore-onsite
revenue mix, and competent management. Given these factors and current price levels, our outlook
for the stock and the sector as a whole is mixed.

Currency impact for US investors

The impact by itself of the anticipated currency movements on the ADR (now US$43.01), without
considering changes in the share price, is positive and is expected to be1:

Over 6 months: US$48.26

Over 12 months: US$51.62

Page 1 Refer to page 4 for all footnotes