KR Choksey's research report on Infosys
Infosys Q3FY25 result earnings exceeded our expectations. Revenue stood at INR 4,17,640 Mn, reflecting a 7.6% YoY increase (+1.9% QoQ), in line with our estimates, driven by broad-based growth across key verticals (excl. retail) and regions (excl. RoW). EBIT of INR 89,120 Mn grew by 11.9% YoY (+3.0% QoQ), exceeding our projections; EBIT margins stood at 21.3% (+83bps YoY/ 24bps QoQ). PAT jumped by 11.6% YoY (+4.7% QoQ) to INR 68,220 Mn; PAT margins improved by 59bps YoY (+44bps QoQ) to 16.3%. We maintain our FY26E and FY27E EPS estimates of INR 72.8 and INR 79.7, respectively, underpinned by enhanced revenue visibility from small deal wins that are expected to lead to accelerated revenue conversion, further supported by the company's potential to secure large-scale deals in the future, coupled with its strong growth prospects in key verticals such as BFSI and manufacturing, outperforming peers like TCS and HCL Tech.
Outlook
We assign a P/E multiple of 27.0x and roll over our valuation to FY27E, to arrive at a target price of INR 2,154 (previously: INR 2,110). Accordingly, we upgrade our rating from an "ACCUMULATE" to “BUY” on INFO.
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