MUMBAI: Infosys Ltd on Thursday became the fifth Indian company to cross ₹5 trillion in market capitalization, and the shares have rallied nearly 61% so far this year. It is the second IT firm in the country to achieve the milestone.
The stock hit a new record of ₹1,185 each in EEB today, 4.3% more than its previous close, bringing its market capitalization to ₹5.04 trillion after the company’s better-than-expected September quarter earnings.
Infosys also raised its forecast for annual revenue growth on the back of continued strength in digital services operations.
Currently, Reliance Industries is the most valued company in India with a market capitalization of ₹15.43 trillion, followed by TCS and HDFC Bank in ₹10.42 billion and ₹6.62 trillion, respectively.
Infosys raised its revenue growth guidance to 2-3% for the year through March 31 from 0-2% above in constant currency terms and provided a margin guidance of 23-24% versus 21-23%. previous.
“The upward revision of the fiscal year 21 guidance with revenue growth is positive but still conservative,” Motilal Oswal said in a report to his investors. “We expect Infosys to deliver superior guidance in FY 21 despite margin headwinds (Q4 salary increases, big deals increase, seasonality, over-margin factors, etc.) and based on the gains from strong deals, “the report adds.
Its profit for the quarter increased 20.5% to ₹4,845 crore for a year. Revenues increased 8.6% to ₹24,570 crore. Dollar revenue grew 3.2% yoy and 6.1% sequentially to $ 3.31 billion thanks to gains from large deals worth $ 3.15 billion. The operating margin expanded to 25.4% from 22.7% in the previous three months.
“We remain constructive with Infosys in the medium and long term with their ability to engage with large clients for their large transformation programs; we expect Infosys growth in the medium and long term to be similar to TCS and we expect the payment rate gradually improve, reaching a similar TCS payout in 3-5 years We increased the Infosys valuation multiple to 24 times (from 23 times previously) the advance PE in FY23e EPS, which is in line with our TCS valuation multiple. We expect the long-term growth rate of TCS and Infosys to be similar to TCS, “Antique Broking said in its report to investors.
The brokerage has raised its target price per share to ₹1,280 each of ₹1,150.
Of the 47 brokers who follow Infosys shares on Bloomberg, 41 have recommended a “buy” rating, two have a “sell” rating and four have a “hold” rating.
Many brokerage firms have raised their target price on the bond after Infosys’ September quarter earnings. Motilal Oswal has reiterated Buy and increased its price target by 19% to ₹1,355 per share, Emkay has increased its price target to ₹1,360 of 1,137 per share, Elara has held Buy with a higher price target of ₹1,325 each, BoB Cap has maintained the ADD rating with a price target of ₹1,210 of ₹1,020 per share.
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