BNP Paribas upgrades Infosys, raises target price to 3,550

BNP Paribas has upgraded Infosys to "buy" from "hold" and raised its target price to 3,550 rupees ahead of the company's September-quarter earnings on Friday.

"Despite Infosys's recent struggles, we believe an uptick in demand, renewed focus on traditional service lines and cost initiatives will lead to revenue growth stabilising and currently depressed quarterly margins recovering. This in turn should lead the stock to re-rate," BNP said in a note.

BNP added there is improvement in the core markets of Infosys and it may raise its FY14 dollar revenue growth guidance in the second-quarter results.

Infosys shares rose just 0.3 percent in the previous week, underperforming the BSE benchmark for IT sector which rose 2.4 percent in the same period.

Infosys shares are up 0.10 percent at 3,019 in early trade today.