Accumulate Infosys; target of Rs 800: Arihant Capital

Arihant Capital's research report on Infosys

Revenues were Rs 21,400 crore for the quarter ended December 31, 2018, YoY growth of 20%; QoQ growth of 4%. Revenues grew sequentially by 3.8% in INR terms and 2.7% in constant currency terms. Digital revenues at $942 million (31.5% of total revenues), YoY growth of 33.1% and sequential growth of 5% in cc terms. EBIT margins stood at 20.5% vs 23.3% Qoq, this includes one off. Net profit was Rs 3,610 crore for the quarter ended December 31, 2018, YoY de growth of 30%; QoQ de growth of 10%.

Outlook

Currently the stock is trading at a PE of 17x to its estimated FY20 EPS. We valued Infosys at PE of 20x of our estimated FY20 EPS of Rs 40 and arrive at a target price of Rs 800 with ‘Accumulate’ rating on the stock.