Arihant Capital has given Accumulate recommendation for Infosys with a target price of Rs. 1932 in its research report issued on Oct 14, 2021
Arihant Capital’s research report on Infosys
Infosys (INFY) has reported robust Q2FY22 numbers, above our estimate on all fronts, and raised growth guidance for FY22E. Constant Currency Revenue growth +20.7% YoY/5.7% QoQ to (Mn USD) 3,998 against our estimate 3,941 (Mn USD). Infosys has reported consolidated revenue of INR 29,602 Cr, +20.5% YoY/6.1% QoQ in Q2FY22 against our estimate of INR 29,479 cr. Consolidated EBITDA stood at INR 6,972 Cr, up by 14.1% YoY/3.6% QoQ against our estimate of INR 6,996 Cr. On the margins front, EBITDA margin contracted by 180 bps YoY/ 12bps QoQ to 23.6% against our estimate of 23.7%. Consolidated PAT stood at INR 5,421 Cr, up by 11.9% YoY/4.4% QoQ against our estimate of INR 5,352 Cr. TCV of $2.15 Bn in Q2 against $2.6 Bn in Q2 FY21. Interim dividend of `15 per share for FY22 • Raised revenue growth guidance to 16.5%-17.5%. (*Expected 15-17%).
We value Infosys at P/E of ~27x to its FY24E EPS INR 71, which yields a target Price of INR 1,932 per share. We upgrade our rating to Accumulate from Hold.