Buy Infosys; target of Rs 1660: Motilal Oswal

Motilal Oswal is bullish on Infosys recommended buy rating on the stock with a target price of Rs 1660 in its research report dated October 13, 2023.

Broker Research

October 13, 2023 / 14:42 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Infosys

INFO reported 2QFY24 revenue at USD4.72b, up 2.3% QoQ in CC terms and ahead of our estimate of 0.8% QoQ CC growth, primarily due to a one-time pass-through revenue gain of 160bp. Large deal TCV at USD7.7b (48% new) was the highest ever as it won four mega deals during the quarter. However, despite the strong revenue beat and deal inflow, INFO surprisingly lowered the upper end of its FY24 revenue growth guidance to +1.0-2.5% YoY CC from +1.0-3.5% YoY CC earlier, attributing it to continued weakness in discretionary spends and a delay in mega deal scale-up to FY25. EBIT margin was up 40bp to 21.2% (50bp beat), led by lower net employee count, high utilization, good productivity and one-time items. Despite the revenue guidance cut, INFO has maintained its FY24 EBIT margin guidance at 20-22%.

Outlook

Despite near-term weakness, we expect INFO to be a key beneficiary of the acceleration in IT spends in the medium term. Based on our revised estimates, the stock is currently trading at 21x FY25E EPS. We value the stock at 24x FY25E EPS, implying a TP of INR1,660.

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