Buy Infosys; target of Rs 1676: YES Securities

YES Securities is bullish on Infosys has recommended buy rating on the stock with a target price of Rs 1676 in its research report dated February 13, 2023.

Broker Research

April 17, 2023 / 17:09 IST

Buy

26 Aug, 2025 12:21

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YES Securities' research report on Infosys

Infosys (INFO) reported weak financial performance for the quarter. Both, the sequential revenue growth and EBIT margin was below expectation. It reported decrease in revenue by 3.2% QoQ in cc terms led by unplanned project ramp downs in Retail, Hitech, BFSI and Telecom verticals. Revenue declined by 2.3% QoQ in USD terms (down 2.3% QoQ in INR terms). EBIT margin declined by 47 bps QoQ at 21.0% led by lower utilization and one-off revenue impact in the quarter. There was some moderation in employee attrition as LTM attrition was down 340 bps QoQ to 20.9%. The multiyear tech adoption cycle broadly remains intact led by adoption of cloud and data analytics. However, the clients remain cautious regarding the evolving macroeconomic situation in the US and Europe and there has been slowdown in discretionary tech spending in sectors such as Hitech, Retail, Telecom, etc. and it is expected to lead to near term moderation in revenue growth. Employee attrition has started moderating and should support operating margin going ahead.

Outlook

We estimate revenue CAGR of 11.9% over FY23‐25E with average EBIT margin of 22.1%. We rollover to FY25E estimates and maintain our BUY rating on the stock with revised target price of Rs 1,676/share at 22.0x on FY25E EPS. The stock trades at PER of 21.1x/18.1x on FY24E/FY25E EPS.

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