Infosys faces rising taxes, competition - Barron's

PHILADELPHIA (Reuters) - Shares of Infosys Technologies Ltd could be headed for a fall as the company approaches the expiration of some beneficial tax breaks and rising competition from its peers, according to a report by Barron's.

Infosys was an early adoptor of certain tax benefits, making it face expiration of these perks earlier than its peers, Barron's reported in its electronic edition.

Susquehanna analyst James Friedman told Barron's that the expiration of the tax benefits could push Infosys's tax rate toward or above 25 percent, up from 13 percent in fiscal 2009.

Meanwhile, competition is rising, and Infosys' profit margins could suffer if it increases wages to catch up to its peers. Also, the rise in the rupee's rise and any move by India to raise benchmark interest rates to fight inflation could hurt Infosys.

Friedman has a price target on the stock of $37. Shares of Infosys's American depositary receipts closed on Friday at $48.58.

(Reporting by Jessica Hall; Editing by Diane Craft)