Buy Infosys; target of Rs 2200: Motilal Oswal

Motilal Oswal's research report on Infosys

Infosys (INFO) reported 3QFY25 revenue of USD4.9b, growth of 1.7% QoQ/6.1% YoY CC vs. our estimate of 1.0% QoQ CC. EBIT margins stood at 21.3% vs. our estimates of 20.8%. EBIT grew 3.0% QoQ/11.9% YoY to INR89b (est. INR86b). PAT came in at INR68b, up 4.6% QoQ/11.5% YoY, in line with our estimate of INR68b. The company upgraded its FY25 CC revenue growth guidance to 4.5-5% (3.75-4.5% earlier). The top end of guidance implied a QoQ decline of ~1.0% for 4Q. Large deal TCV stood at USD2.5b vs. USD2.4b in 2Q, up 4.2% QoQ. The book-to-bill ratio was 0.5x. Net new TCV was up 57% QoQ. For 9MFY25, revenue/EBIT/PAT grew 5.5%/7.1%/7.8% compared to 9MFY24.

Outlook

We expect revenue/EBIT/PAT to grow 10.5%/10.8%/9.0% YoY in 4QFY25. We reiterate our BUY rating on INFO with a TP of INR2,200, implying a 14% potential upside.

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