Infosys Ltd. share price target

Healthy deal wins, client addition key positive Infosys added one client in the US$50 million, two in the US$100 million and eight in the US$10 million client buckets, representing a healthy client mining and farming strategy. Further, the company's deal wins have also been healthy, up 2x to US$6.3 billion. Out of the overall deal pipeline, we believe US$ 3 billion would be net new deal wins, which can help Infosys to register double digit growth in FY20E. Further, digital growth has also been healthy (up 32.0% YoY, 31% of overall revenues). This gives us confidence...

Infosys reported inline Q4FY19 revenue performance but sharp miss on Change in Estimates | Target | Reco margins due to large deal impact & investments on people. Management guided a lower than expected revenue growth for FY20E due to uncertain...

Infosys's Mar'18 quarter performance was mixed bag with inline revenue, healthy deal wins and subpar operating margins. Combination of soft revenue growth guidance (of 7.5 to 9.5% YoY cc growth) with lower reset of EBIT margin range (to 21-23%) makes FY20 outlook subdued. Tight US talent market and elevated attrition will limit efforts to recoup profitability. We downgrade recommendation a notch to ADD (V/s BUY earlier) even as...

Infosys' softening FY19 margin trajectory (-150bps vs. +80bps for TCS despite INR tailwinds), is expected to continue over FY20 (-160bps erosion). This derives from a rising cost of delivery (higher localisation, sub-contracting) and the persistent challenge of high attrition, large deal investments and softness in the core BFSI vertical. We downgrade Infosys to NEUTRAL (from BUY) post its inline revenues in 4QFY19. The growth challenges and margin trajectory compels us to cut estimates by ~5%. Our TP falls to Rs 755 (Rs 805 earlier) at 18x FY21E EPS.

13 April 2019 full-year CC revenue growth of 9%, EBIT growth of 10.6% (EBIT margin shrank 140bp YoY) and adj. Including the buyback/special dividend, INFO paid out ~125% of its FY19 adjusted profits. For the quarter, INFO grew its revenue by 11.8% YoY CC, EBIT by 3.3% YoY CC and adj. net income by 10.5% YoY CC. QoQ CC revenue growth of 2.1% was in line, but the EBIT margin drop of 160bp QoQ (on adjusted 3Q base of 23%) was higher than anticipated (by 100bp). PAT of INR4.07b exceeded our estimate by 1.5% due to a lower tax rate (22.

and strong deal signings: Infosys delivered inline revenue growth during Q4FY2019, a with a constant currency (CC) revenue growth of 2.1% q-o-q/11.7% y-o-y (second consecutive quarter of double-digit growth). CC revenue growth was primarily led by strong growth in communication (16.6% q-o-q on CC) and hi-tech (6.9% q-o-q on CC). However, financial services CC revenues growth declined 0.8% owing to a slowdown in...

View: Margin concern continues; downgrade to SELL We believe that higher sub-contracting cost, higher attrition, implied investment and localisation in the medium term will lead to margin pressure in FY20 for INFY. We expect INFY to report margins towards the mid-point of its guidance in FY20. We downgrade our earnings estimates by 12%/11.5% for FY20/FY21, primarily because of rupee appreciation and margin headwinds going ahead. We change our rupee assumption to ` 70 for FY20/FY21 as compared to ` 74/` 76 earlier which led to major...

Infosys' 2.1% qoq CC growth for Q4FY19 was in line with our expectations of 2.0%. EBIT margins of 21.4% was down ~110bps qoq. For the full-year FY19, Infosys posted 9.0% CC growth vs. guidance of 8.5-9.0%, while EBIT margins declined 150bps yoy to 22.8%. Infosys provided modest CC growth guidance of 7.5-9.5% and lowered its margin guidance band by 100bps to 21-23% for FY20E. Ex-contribution from its Stater/other...

Infosys came out with good set of numbers in Q4FY19, ahead of our estimate though topline was slightly below our estimate and EBIT margin faced some pressure. Revenue was flat sequentially at Rs 21,539cr against our estimate of Rs 22,109cr. PAT for the quarter stood at Rs 4074cr ahead of our estimate of Rs 3860cr. We are positive on the stock from longer term perspective, however due to cut in FY20E guidance by management, the stock might remain under pressure for few sessions. We maintain our...

Belgium and Germany. Infosys will pay EUR 127.5 mn (~USD 143 mn) for the 75% stake. (Expected closure: Q1FY20). Acquisition of Stater is in sync with Infosys strategy of strengthening its position in Continental Europe and we expect revenue for the business to be ~USD 200 mn with high single digit margin, implying valuation of ~1x EV/Sales. It will add ~1.6% revenue growth & impact on EBIT margins will be 25bps (assuming EBIT margins of 7%) & will be marginally EPS-dilutive on FY20E. The inorganic strategy of Infosys...