Buy Infosys; target of Rs 4191: Kotak Securities

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26 Aug, 2025 12:21

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Kotak Securities research report on Infosys“While the revenue growth largely met estimates, the positive surprise came from margins in 2QFY15. This was the second successive quarter of margin surprise. Improved utilization despite the highest net employee additions in over 10 quarters, provided the surprise. The company won orders worth $600mn TVC in 2QFY15 from 7 large deals. Attrition at around 20% remained high but has reduced on a MoM basis, according to the management. Higher automation, artificial intelligence, design thinking, etc form the core of the strategic vision laid down by Mr. Sikka.” “We believe that, these will shore up the growth rates of Infosys and sustain margins but, only over the longer term. The FY15 revenue growth guidance of 7% - 9% (maintained) indicates CQGR of about 3% for the last 2 quarters. We factor in 8% USD revenue growth in FY15 and 11.5% in FY16. We increase our EPS estimates for FY15 and FY16 largely due to the improved margin profile and our assumption of a slightly weaker rupee in FY16 (59.5 / USD vs 59 earlier). EPS for FY15 and FY16 stand at Rs.213 (Rs.208 earlier) and Rs.237 (Rs.226 earlier). We have been positive on the long-term demand prospects for quite some time. With the developed economies stabilizing, we do expect the demand scenario to improve over the next few quarters. Our TP stands at Rs.4191 (Rs.3629 earlier) based on 17.6x FY16 estimates. Maintain BUY,” says Kotak Securities research report.

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