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Infosys Ltd – About
Infosys Ltd is the second-largest Information Technology company in India, trailing only behind TCS.
This Indian multinational corporation is a powerhouse, offering a wide range of services to help clients execute their strategies for the digital age.
Infosys Ltd is a global leader in next-generation digital services and consulting. They have built a reputation for delivering innovative solutions that enable businesses to thrive in the digital era.
Infosys has a widespread presence, serving clients in over 56 countries.
Infosys Ltd – Earnings review
Infosys has recently released its Q2 FY24 financial results.
Q2 FY24 Performance Highlights
- Revenue Growth: Infosys reported a robust performance with revenue growth exceeding expectations. The company recorded a quarter-on-quarter (QoQ) increase in revenue of 2.3% in constant currency terms, demonstrating its ability to capture market opportunities and deliver value to its clients. In USD terms, revenue grew by 2.2% QoQ, and in INR terms, it saw a healthy 2.8% QoQ growth.
EBIT Margin: Infosys’ Earnings Before Interest and Taxes (EBIT) margin met expectations, with a notable improvement of 42 basis points (bps) QoQ. This improvement was primarily attributed to lower Selling, General, and Administrative (SG&A) costs during the quarter, showcasing the company’s commitment to operational efficiency.
Large Deal Wins: Infosys reported significant large deal wins, amounting to $7.7 billion in Q2 FY24. This marked a substantial increase from the $2.3 billion reported in the previous quarter (Q1FY24). These large deal wins demonstrate Infosys’ strong position in the competitive IT services landscape.
Infosys Ltd – BUY rating by YES Securities
Infosys is trading currently at 1434.
Based on Infosys’ Q2 FY24 performance and future prospects, YES Securities maintain BUY rating on the stock. Here’s why:
- Valuation: Currently, Infosys is trading at a PER of 24.4x on FY24E EPS and 20.3x on FY25E EPS. These valuation metrics suggest that the stock is reasonably priced, considering its growth potential and strong financial performance.
- Revised Target Price: YES Securities have revised target price for Infosys shares to Rs 1,838 per share. This is based on a price-to-earnings ratio (PER) of 25.5x on FY25E (Estimated Fiscal Year 2025) earnings per share (EPS).
Infosys Ltd – Technical analysis
Below is the price chart of Infosys Ltd:
Above screenshot is a weekly price chart of Infosys Ltd.
From the price action, it can be noted that, stock has been trading in a downward channel (between two white lines) for the last one year. It is known as a Lower-High and Lower – Low formation (LH-LL).
If the price firmly closes above recent high i.e., above 1530 on weekly basis, the stock can be considered for buying for a target of about 1850 to 1900 which coincides with the price Target given by YES Securities.
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