Infosys Q4 Results Review: Poor Quarter But Commentary Springs A Surprise; Motilal Oswal Maintains 'Neutral'

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Motilal Oswal Report

Infosys Ltd. reported Q4 FY25 revenue of $4.7 billion, down 3.5% QoQ constant currency/up 4.8% YoY CC versus our estimate of 1.0% QoQ CC decline. For full year, revenue stood at $19.2 billion, up 4.2% YoY CC. Ebit margins stood at 21% versus our estimates of 20.6%. Ebit declined 3.8% QoQ/up 12.5% YoY to Rs 85 billion (estimate Rs 87 billion). PAT came in at Rs 68 billion, flat QoQ/up 12.1% YoY, above our estimate of Rs 67 billion.

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 total contract value stood at $2.6 billion versus $2.5 billion in Q3, 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. We expect revenue/Ebit/PAT to grow 5.4%/4.7%/3.9% YoY in Q1 FY26. We reiterate our Neutral rating on Infosys with a target price of Rs 1,600, implying a 13% potential upside.

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