Brokerages Raise Price Targets On Infosys After Q3 Results
Most brokerages expect the valuation gap between Infosys and TCS to narrow.
Analysts raised price targets and earnings estimates for Infosys Ltd. after India’s second-largest software services provider beat forecasts in the third quarter and hiked revenue and margin guidance for the ongoing fiscal.
The company’s revenue rose 5.5% over the preceding quarter to Rs 25,927 crore in the October-December period. Its dollar revenue increased 6.2%. Infosys’ operating margin remained steady at 25.4% against 25.3% despite wage hikes and cross-currency headwinds.
Infosys now expects FY21 revenue to grow at 4.5-5% compared with 2-3% growth forecast earlier. It has also hiked operating margin guidance to 24-24.5% from 23-24% predicted previously.
The company, in a media statement, said large deal total contract value was at all time high of $7.13 billion.
According to analysts, a faster and stronger recovery of the global economy after Covid-19, higher-than-expected revenue and margin growth, along with favourable currency movement, are some of the key catalysts for the stock.
Shares recovered from the day's low after declining as much as 5% to Rs 1,318. The stock currently trades 0.7% lower at Rs 1,377. Of the 47 analysts tracking Infosys, 41 have a ‘buy’ rating, five suggest a ‘hold’ and one recommends a ‘sell’.