Infosys shares: Brokerages raise target price post Q3 results


Infosys shares surged over 1% to 1,898 apiece on the BSE in Thursday’s opening session after the IT giant raised its revenue forecast as it expects 19.5%-20% revenue growth for the financial year to end-March 2022, compared with a previous 16.5%-17.5% predicted earlier, while retaining its operating margin guidance. 

India’s second largest IT company reported a 12% rise consolidated net profit of 5,809 crore for Q3FY22 from 5,197 in the same quarter last year, while its revenue rose 23% to 31,867 crore.

“Infosys’ Q3 results beat estimates across the board led by a strong revenue growth. Amidst high attrition, Infosys has managed its margins well led by pyramid management. We raise our FY22-24 estimates by 2-4% and expect Infosys to deliver 15% EPS CAGR over FY22-24. Infosys remains our top pick,” said Jefferies in a note. 

It has maintained its Buy rating with revised target price of 2,270 ((from 2,200). “While Infosys continues to outperform on growth, 3Q results inspire greater confidence on its ability to manage margins.”

The company’s margin stood at 23.5% in Q3FY22, up from 23.6% in the previous quarter. Infosys said growth remained broad-based during the quarter and deal momentum robust, with digital transformation rapidly scaling across verticals and regions.

Emkay has also maintain Buy rating with a revised target price of 2,160 (earlier 2,100), considering strong earnings momentum and a robust demand environment. Infosys remains confident of sustaining growth momentum on the back of broad-based demand, solid deal intake and a healthy deal pipeline, as per the brokerage.

“The intake of large deals was healthy at $2.5 billion in Q3FY22 (43% new), with 25 large deals signed during the quarter. The deal pipeline remains healthy with a good mix of new and renewal deals, offering good revenue visibility,” the note stated.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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