Hold Infosys; target of Rs 1463: Arihant Capital

Arihant Capital's research report on Infosys

Infosys’ Q4FY21 revenue and PAT performance were below our estimates while margins estimate was above our estimates. Consolidated revenue stood at INR 26,311 Cr, below against our estimates of INR 31,002 cr registering +13.1% YoY/1.5% QoQ. Consolidated EBIT stood at INR 6,440 Cr, below our estimates of INR 6,742 cr, up by 30.7% YoY/-2.3% QoQ. On the margins front, EBIT margin improved by 330bps YoY/-94bps QoQ to 24.5%.Consolidated PAT saw a rise of 16.3% YoY to INR 5,076 cr vs estimates of INR 5,862 Cr , impacted by weak margin performance but supported by revenue growth. Revenues in CC terms grew by 9.6% YoY and 2.0% QoQ. EPS at INR 11.96 in Q4FY21 vs 10.2in Q4FY20 respectively.

Outlook

We value Infosys at P/E of 25x to its FY23E EPS 58.5, which yields target Price of INR 1463 per share. We change our rating to Hold from Accumulate.

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