Hold Infosys; target of Rs 1573: Geojit Financial Services

Geojit Financial Services research report on Infosys

Infosys Limited provides IT consulting and software services, including ebusiness, program management and supply chain solutions. The Group’s services include application development, product co-development, and system implementation and system engineering. Infosys targets businesses specialising in the insurance, banking, telecom and manufacturing sectors. Infosys Limited posted Q4FY24 revenue of Rs. 37,923cr (+1.3% YoY), supported by growth in revenue from the Manufacturing as well as Energy, Utility, Resources, and Services segment and PAT of Rs. 7,970cr (+30.1% YoY) on account of double-digit growth across all verticals EBITDA margin shrank 80bps YoY to 23.2% as a result of high operating costs during the quarter. Total headcount was 317,000, while yearly attrition rate declined further by 0.3% to 12.6%. Continued growth in revenue along with new high-value deal wins should aid growth.

Outlook

However, lower discretionary spending and pressure on margins remain a concern in the near term. Therefore, we reduce our rating on the stock to HOLD with a lowered target price of Rs. 1,573 based on 22x FY26E adj. EPS.

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