Accumulate Infosys; target of Rs 1932: Arihant Capital

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Arihant Capital's research report on Infosys

Infosys (INFY) has reported robust Q2FY22 numbers, above our estimate on all fronts, and raised growth guidance for FY22E. Constant Currency Revenue growth +20.7% YoY/5.7% QoQ to (Mn USD) 3,998 against our estimate 3,941 (Mn USD). Infosys has reported consolidated revenue of INR 29,602 Cr, +20.5% YoY/6.1% QoQ in Q2FY22 against our estimate of INR 29,479 cr. Consolidated EBITDA stood at INR 6,972 Cr, up by 14.1% YoY/3.6% QoQ against our estimate of INR 6,996 Cr. On the margins front, EBITDA margin contracted by 180 bps YoY/ 12bps QoQ to 23.6% against our estimate of 23.7%. Consolidated PAT stood at INR 5,421 Cr, up by 11.9% YoY/4.4% QoQ against our estimate of INR 5,352 Cr. TCV of $2.15 Bn in Q2 against $2.6 Bn in Q2 FY21. Interim dividend of `15 per share for FY22 • Raised revenue growth guidance to 16.5%-17.5%. (*Expected 15-17%).

Outlook

We value Infosys at P/E of ~27x to its FY24E EPS INR 71, which yields a target Price of INR 1,932 per share. We upgrade our rating to Accumulate from Hold.

For all recommendations report, click here

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