Accumulate Infosys; target of Rs 1933: KR Choksey

KR Choksey's research report on Infosys

Infosys announced a strong start to FY25 with Q1FY25 results in line with our estimates. Revenue in Q1FY25 grew to INR 393,150 Mn up 3.6% YoY (+3.7% QoQ) driven by growth in communication, Energy, Utilities, Resources & Services, and manufacturing segments; in line with our projections. EBIT grew to INR 82,880 Mn in Q1FY25, up 5.0% YoY (+8.8% QoQ) with margins expanding 11 bps YoY (+84bps QoQ). PAT jumped to INR 63,740 Mn, up 7.2% YoY; however, earnings declined sequentially by 20.1%, due to higher reported other income and lower tax rates in Q4FY24.

Outlook

We increase our FY26E EPS to INR 77.3 and raise our P/E to 25.0x to reflect strong growth in Q1FY25, higher revenue growth guidance, and a robust deal pipeline. We raise our target price to INR 1,933 (previously: INR 1,531) and retain the “ACCUMULATE” rating on the shares of Infosys Ltd.