Buy Infosys; target of Rs 2200: Motilal Oswal

Motilal Oswal's research report on Infosys

Infosys (INFO) reported 2QFY25 revenue of USD4.9b, growth of 3.1% QoQ/3.3% YoY CC vs. our estimate of 3.0% QoQ CC. EBIT margins stood at 21.1% vs. our estimates of 20.3%. EBIT grew 4.4% QoQ/4.5% YoY to INR86b (est. INR83b). PAT came in at INR65b, up 2.2% QoQ/4.7% YoY, in line with our estimate of INR66b. FY25 revenue growth guidance upgraded from 3-4% to 3.75%-4.5%. For 1HFY25, revenue/EBIT/PAT grew 4.4%/4.8%/5.9% compared to 1HFY24. We expect revenue/EBIT/PAT to grow by 8.1%/8.8%/10.4% YoY in 2HFY25. INFO reported a deal TCV of USD2.4b, down 41.5% QoQ and 68.8% YoY.

Outlook

We expect INFO to be a key beneficiary of the acceleration in IT spends in the medium term. We value INFO at 28x Sep’26 EPS. This yields a rounded TP of INR2,200, implying a 12% upside. We reiterate our BUY rating.