Neutral Infosys; target of Rs 1600: Motilal Oswal

Motilal Oswal's research report on Infosys

Infosys (INFO) reported 4QFY25 revenue of USD4.7b, down 3.5% QoQ CC/up 4.8% YoY CC vs. our estimate of 1.0% QoQ CC decline. For full year, revenue stood at USD19.2b, up 4.2% YoY CC. EBIT margins stood at 21% vs. our estimates of 20.6%. EBIT declined 3.8% QoQ/up 12.5% YoY to INR85b (est. INR87b). PAT came in at INR68b, flat QoQ/up 12.1% YoY, above our estimate of INR67b. The company guided for FY26 CC revenue growth of 0-3%. This guidance implies a CQGR of +0.5% to +1.5% over the next four quarters. Large deal TCV stood at USD2.6b vs. USD2.5b in 3Q, up 4% QoQ. The book-to-bill ratio was 0.5x. Net new TCV was down 24.7% QoQ. For FY25, revenue/EBIT/PAT grew 6.1%/8.4%/8.8% YoY in INR terms.

Outlook

We expect revenue/EBIT/PAT to grow 5.4%/4.7%/3.9% YoY in 1QFY26. We reiterate our NEUTRAL rating on INFO with a TP of INR1,600, implying a 13% potential upside.