Buy Infosys; target of Rs 1850: Emkay Global Financial

Emkay Global Financial is bullish on Infosys has recommended buy rating on the stock with a target price of Rs 1850 in its research report dated January 12, 2024.

Broker Research

January 12, 2024 / 13:04 IST

Buy

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Infosys

Infosys reported a tad better-than-expected operating performance for Q3. Revenue declined 1.2% QoQ to USD4.66bn (1% in cc) due to weak discretionary spending, further accentuated by lower volumes because of higher furloughs. EBITM fell 70bps QoQ to 20.5% due to wage hikes (effective 1-Nov-23), cyber security incident partially offset by margin-improvement initiatives under Project Maximus, and currency benefits. Large deal TCV stood at USD3.2bn, with 71% net new (9MFY24 – large deal TCV of USD13.2bn, up 70% YoY; net new TCV of USD7.2bn, up 106% YoY). Infosys has tightened its FY24 revenue growth guidance to 1.5-2% CC (from 1-2.5%), implying -1.5% to 0.5% sequential growth in Q4.

Outlook

As per management, the demand environment is largely unchanged, with cost takeout and consolidation deals continuing to see traction. We expect growth to accelerate in FY25 on account of ramp-up of large deals, strong deal pipeline, and expected recovery in discretionary spending. We tweak FY24-26 EPS estimates by under 1%, factoring in Q3 performance. We retain BUY with an unchanged TP of Rs1,850 at 25x its Dec-25E EPS.

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