Neutral Infosys; target of Rs 1659: Arihant Capital

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26 Aug, 2025 12:21

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Arihant Capital's research report on Infosys

Infosys (INFY) has reported weak Q4FY22 numbers, below our estimate on all fronts; Raised revenue guidance but decline in margin guidance band for FY23. Constant Currency Revenue growth +18.5% YoY/0.7% QoQ to $4,280 mn against our estimate $4,352 mn. Infosys has reported consolidated revenue of INR 32,276 Cr, +22.7% YoY/1.3% QoQ in Q4FY22 against our estimate of INR 32,658 cr supported by continued momentum in large deal wins with TCV of $9.5 billion. Consolidated EBIT stood at INR 6,956 Cr, up by 8% YoY/-7.1% QoQ against our estimate of INR 7,527 Cr. On the margins front, EBIT margin contracted by 292 bps YoY/ 193bps QoQ to 21.6% against our estimate of 23.0%. Consolidated PAT stood at INR 5,695 Cr, up by 12.2% YoY/2.2% QoQ against our estimate of INR 6,082 Cr. Added 85,000 freshers in FY 22, will add over 50,000 freshers in FY23.Attrition zooms to 27.7% ìn Q4. Raised revenue growth guidance to 13-15% in cc terms. (Expected 11- 14%).and operating margin guidance of 21%-23% for FY23. TCV of large deal wins was $2.3 billion in Q4. The company net added 85,000 employees in FY22. It plans to hire upwards of 50,000 employees in FY23.

Outlook

Considering expensive valuations and margin pressure, we value Infosys at a P/E of 24x to its FY24E EPS of INR 69.1, which yields a Target Price of INR 1,659 per share. We downgrade our rating to Neutral from Accumulate earlier on the stock.

More Info

At 17:30 Infosys was quoting at Rs 1,748.65, up Rs 7.20, or 0.41 percent.

It has touched an intraday high of Rs 1,759.45 and an intraday low of Rs 1,732.25.

It was trading with volumes of 201,207 shares, compared to its thirty day average of 359,607 shares, a decrease of -44.05 percent.

In the previous trading session, the share closed down 1.43 percent or Rs 25.20 at Rs 1,741.45.

The share touched its 52-week high Rs 1,953.70 and 52-week low Rs 1,311.80 on 17 January, 2022 and 14 May, 2021, respectively.

Currently, it is trading 10.5 percent below its 52-week high and 33.3 percent above its 52-week low.

Market capitalisation stands at Rs 735,611.35 crore.

For all recommendations report, click here

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