Dolat Capital Market's research report on Infosys
Infosys reported a revenue growth of 4.0% QoQ in CC terms (DE 2.1%) due to strong execution across verticals and a 268bps QoQ OPM improvement to 25.3% (DE 22.8%) led by improved productivity (RPP 100bps), better utilization (80bps) and offshore shift (80bps). Upgraded growth guidance for FY21 to 2%-3% in CC terms (earlier 0-2%) and OPM guidance to 23-24% (from 21-23%). OPM upgrade came as bigger surprise given weakness in past and wage hikes. The OPM band is not sustainable as travel normalize and offshore shift reverses. Signed best ever TCV of $3.15Bn (86% is New) taking TTM TCV to $8.3Bn. Pipeline remains strong as clients are focusing on digital transformation, cost take-outs and efficiency (automation).
Factoring strong performance, robust TCV wins, confident commentary and upgrade in guidance/outlook, we have upgraded our growth estimates by ~1.25% in FY21/22E and have assigned Accumulate view on stock with TP of Rs. 1,270 (24x on FY23E EPS).