Buy Infosys: target of Rs 1820: Sharekhan

Sharekhan's research report on Infosys

Though revenue growth was robust, EBIT margin lagged our estimates. Large deal TCVs stayed healthy and FCF conversion continued to improve. Management increased FY2022 CC revenue growth guidance to 14-16% from 12-14% earlier, beating our expectations. EBIT margin guidance was maintained at 22-24% as expected. We expect Infosys to be in the top growth quartile in the medium term, led by healthy deal wins, solid execution, robust deal pipeline and strong digital capabilities. We expect its net profit to clock a 16% CAGR over FY2021-2023E.

Outlook

We maintain a Buy on Infosys with a revised PT of Rs. 1,820 given strong outperformance in revenue growth versus large peers, a robust deal pipeline and strong demand.

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