Accumulate Infosys; target of Rs 1458: KR Choksey

KR Choksey's research report on Infosys

Infosys Ltd (INFY) has reported quarterly numbers in line with our expectations. The CC revenue from operations in Q1FY24 increased to INR 4,617 mn, a rise of 4.2% on a YoY basis and 1.0% on a QoQ basis in constant currency. The company reported revenues of INR 379,330 mn, showing growth of 10.0% YoY and 1.3% QoQ. • The EBIT for Q1 FY24 increased by 0.2% on a QoQ basis to INR 78,910 mn, and rose by 14.1% on a YoY basis. The EBIT margin for Q1 FY24 was registered at 20.8%, representing a 24 bps dip on a QoQ basis and a 74 bps improvement on a YoY basis. • The PAT for Q1 FY24 also increased by 3.6% on a QoQ basis to INR 24,170 mn, and grew by 11.3% on a YoY basis. The PAT margin was registered at 15.7%, showing a fall of 70 bps on a QoQ basis and an improvement of 10 bps on a YoY basis. • The EPS in Q1 FY24 stood at INR 14.37 per share, compared to INR 14.62 per share in Q4 FY23 and INR 12.74 per share in Q1 FY23.

Outlook

We are assigning a P/E multiple of 23x (24X earlier) to the FY25 estimated EPS of INR 63.4 to arrive at a target price of INR 1,458 per share (Earlier 1645) , an upside of ~9.1% over the CMP. We changed our rating from “BUY” to “ACCUMULATE” rating to the stock.

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