Accumulate Infosys; target of Rs 2124: Arihant Capital

Arihant Capital's research report on Infosys

Infosys (INFY) has reported robust Q3FY22 numbers, above our estimate on the revenue front, and raised growth guidance for FY22. Constant Currency Revenue growth +20.9% YoY/6.3% QoQ to (Mn USD) 4,250 against our estimate 4,124 (Mn USD).Infosys has reported consolidated revenue of INR 31,867 Cr, +22.9% YoY/7.7% QoQ in Q3FY22 against our estimate of INR 30,958 cr. Consolidated EBIT stood at INR 7,484 Cr, up by 13.6% YoY/7.3% QoQ against our estimate of INR 7,614 Cr. On the margins front, EBIT margin contracted by 193 bps YoY/ 7bps QoQ to 23.5% against our estimate of 24.6%. Consolidated PAT stood at INR 5,809 Cr, up by 11.8% YoY/7.2% QoQ against our estimate of INR 5,935 Cr. TCV of $2.53 Bn in Q3 against $2.15 Bn in Q2FY22. Raised revenue growth guidance to 19.5%-20.0%. (Expected 17.5- 18.5%).

Outlook

We value Infosys at P/E of 28x to its FY24E EPS of INR 75.9, which yields a Target Price of INR 2,124 per share. We maintain our Accumulate rating on the stock.