Accumulate Infosys; target of Rs 2041: Religare Retail Research

Religare Retail Research report on Infosys

Infosys reported increased in Q2FY25 constant currency revenue growth by 3.1%/3.3% QoQ YoY respectively. In rupee terms, revenue reached ₹40,986 crore, marking a growth of 4.3% QoQ and 5.1% YoY. Dollar revenue stood at USD 4,894 million, up by 3.8% QoQ and 3.7% YoY. The growth was primarily driven by the manufacturing, energy, communications, financial services and high-tech sector. However, retail and life sciences sectors experienced a decline. Geographically, India and Europe showed strong growth, while North America remained flat.

Outlook

On a financial front, we expect revenue/EBIT to grow by 6.2%/10.1% CAGR over FY24-26E as we have incorporated management guidance for FY25. We have retained our rating to Accumulate on the stock by revising the target price to Rs 2,041 by assigning a P/E multiple of 26x (unchanged) on FY26E EPS.