Buy Infosys; target of Rs 920: Sharekhan

Sharekhan's research report on Infosys

Infosys reported better-than-expected results on all financial fronts despite supply-side constraints, with strong deal wins and FCF generation; EBIT margin improved by 150 bps q-o-q to 22.7%, way ahead of our estimates. Management has resumed guidance with FY2021E revenue growth guidance of 0-2% in CC; margins are likely to be at 21-23% (EBIT margin was 21.3% in FY2020). Even as reduction of IT spending is expected during 2020, Infosys is well poised to gain share in the recessionary environment and outperform peers in terms of revenue growth in FY2021E.

Outlook

We maintain our Buy rating on Infosys with a revised price target of Rs. 920.