Moneycontrol PRO
Upcoming Event:Experts and leaders discuss how modern digital tools are transforming the media industry. Register now

Buy Infosys; target of Rs 1360: Emkay Global Financial

Emkay Global Financial is bullish on Infosys has recommended buy rating on the stock with a target price of Rs 1360 in its research report dated October 14, 2020.

October 15, 2020 / 03:15 PM IST

Emkay Global Financial's report on Infosys


Infosys delivered another stellar quarter, beating consensus estimates on revenue and margins. Revenue grew 6.1% QoQ to $3.3bn. EBITM expanded 270bps to 25.3% (highest quarterly margin since Q4FY16). Strong operating performance led to a net profit beat. For FY21, Infosys raised its revenue guidance to 2-3% YoY cc (from 0-2%) and EBIT margins range to 23-24% (from 21-23%). Its full-year outlook implies a 0.5-1.7% CQGR over the remaining two quarters. Large deal signing remained robust with deal TCV of $3.15bn in Q2 (net new share 86%), highest ever for the company. Net new deal TCV grew ~59% YoY in H1. Infosys continues to outperform TCS in terms of revenue growth (4.8% YoY cc on TTM basis vs. -0.1% for TCS), with the margin differential also narrowing.


Outlook


We expect Infosys valuation gap with TCS to narrow further (trades at ~15% discount vs. >30% in early CY20) with sustained strong operating performance. We assume coverage on the stock with Buy and a TP of Rs1,360 at 25x Sept’22E earnings.


For all recommendations report, click here

Close

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

Broker Research
first published: Oct 15, 2020 03:04 pm
Sections
ISO 27001 - BSI Assurance Mark