Sharekhan has given Buy recommendation for Infosys with a target price of Rs. 1730 in its research report issued on Oct 13, 2022
Sharekhan’s research report on Infosys
Strong beat on EBIT margin at 21.5% (up 150 bps q-o-q) led by utilisation, cost optimisation, pyramiding and currency benefit. TCV deal wins healthy at $2.7 bn (highest in last 7 quarters). However, CC revenue growth of 4% q-o-q was below our estimate of 4.6% q-o-q growth. Management raised its FY23 revenue growth guidance range from 14-16% to 15-16% reflecting optimism due to strong deal momentum despite seasonal weakness in the quarter ahead and given the macro headwinds. However, lowered upper end of its EBIT margin guidance to 21%-22% versus 21-23% earlier. The management cited that there is weakness in some pockets such as mortgages, discretionary retail, telecom, and Hi-tech segments. The company announced an open market buyback of Rs 9300 crore, with maximum price of Rs. 1,850. Buyback would support the stock performance in near term amid market volatility.
Outlook
We maintain a Buy rating on Infosys with an unchanged PT of Rs. 1,730, given strong deal momentum and the management’s optimism on its capabilities and preparedness to address diverse clients’ needs of transformation as well as on cost optimisation.
More Info
At 11:37 hrs Infosys was quoting at Rs 1,489.30, up Rs 69.55, or 4.90 percent.
It has touched an intraday high of Rs 1,493.45 and an intraday low of Rs 1,468.00.
It was trading with volumes of 373,542 shares, compared to its thirty day average of 578,346 shares, a decrease of -35.41 percent.
In the previous trading session, the share closed down 0.64 percent or Rs 9.10 at Rs 1,419.75.
The share touched its 52-week high Rs 1,953.70 and 52-week low Rs 1,355.50 on 17 January, 2022 and 26 September, 2022, respectively.
Currently, it is trading 23.77 percent below its 52-week high and 9.87 percent above its 52-week low.
Market capitalisation stands at Rs 626,671.76 crore.