Infosys Ltd. share price target

Infosys Ltd Q2FY19 results Comment Revenue rose by 7.74% to Rs. 20609.0 Cr in Q2FY19 when compared to the previous quarter. Also, it rose by 17.32% when compared with Q2FY18.

Financial Services & Retail Power the Verticals, Digital Revenue Robust A major positive in 2QFY19 was impressive growth in Financial Services (+5.8% QoQ in CC terms) and Retail (+5.9%) verticals. Stable demand environment and waning client-specific issues augur well for these verticals, which contributed ~50% to Infosys' total revenue (49.1%). Notably,...

Infosys's (INFO) Q2FY19 result was in-line with our forecast as regards headline numbers. While revenue growth of 4.2% QoQ in CC and TCV of US$2bn (highest till date) beat our forecast, EBIT margin of 23.7%, unchanged QoQ, was a miss. Digital revenue is now 31% of INFO's revenue and grew by 13.5%/33.5% QoQ/YoY in CC. INFO has maintained FY19 guidance. While we were forecasting it to maintain the revenue growth guidance, we were expected it to increase EBIT margin guidance. We factor FX rate of R70 vs. Rs68 earlier for H2FY19 and FY20. We increase our FY19/20E EPS by 1.6%/4.6%. We now forecast FY19/20 revenue growth in CC at...

ICICI Securities Ltd | Retail Equity Research US$ revenues grew 3.2% QoQ to $2,921 million (above our estimate of 2.2%) mainly led by healthy growth in BFSI and retail. Constant currency (CC) revenues grew 4.2% QoQ vs. our estimate of 3% QoQ. Rupee revenues grew 7.7% QoQ to | 20,609 crore At 23.7%, EBIT margins were flat QoQ mainly led by higher compensation (-100 bps), subcontracting cost (-50 bps) offset by rupee depreciation (+80 bps) and pricing, onsite mix (+70 bps)...

Maintain BUY with TP of Rs 800, 18x Sep-20E-EPS Infosys (INFY) posted strong revenue and deal bookings, offset by soft operating performance and static guidance (conservative). Revenue came at USD 2,921mn, 4.2/8.1% QoQ/YoY in CC terms, ahead of TCS sequential performance. EBIT margin was flat at 23.7% with INR gains impact (+80bps QoQ) and pricing (+70bps), offset by higher variable pay and senior workforce wage increase (-100bps) and higher sub-contracting expense (-50bps). APAT at Rs 41.10bn was supported by lower ETR.

Strong deal wins in Financial services ( 32% of revenue): Growth is likely to revive from Q2 on the back of strong deal wins in the quarter (USD 446 mn) and continued momentum in tier-II and regional banks.

In 1QFY19, INFO signed USD1.1b TCV of deals, including multiple large deals in the US BFS. The company breached the aspired figure of USD1b after multiple quarters, and cited a strong pipeline that would help their efforts to sustain the same. In 2QFY19, INFOs two deals themselves added up to USD1b+, and there could be more. Prior to this, the company beat Germany-based IT service provider Arvato (link) to clinch USD300m deal from Microsoft. While US BFS saw large deal wins in the last quarter, the segments performance in Europe saw a decline in revenues, which was a cause for concern. INFOs LTM attrition in the last quarter spiked up to 20.6% - a historical high. More disconcerting for the company was elevated attrition in the category of high performers as well.

Several investments are lined up for the remaining quarter. Total revenue per employee increased by 3.5%. Management has finalized a interim dividend of Rs 7/share....

Rupee depreciation led to upgrade: The recent sharp rupee depreciation (around 5% in the past one month) is likely to result in higher upside in EBIT margin and EPS for Infosys, considering 67% revenue booking from USD, lesser cash flow hedges and lower offshore revenue mix (45.4% in Q4FY2018). Since the beginning of Q2FY2019, USD/INR rates have witnessed correction of...

ICICI Securities Ltd | Retail Equity Research Infosys made an announcement on bonus shares with its Q1FY19 results on July 13, 2018. The ratio was one bonus share for every existing equity share i.e. 1:1. The record date for the same is September 5, 2018 while the ex-date for the same is today i.e. September 4, 2018. Consequently, Infosys share price, as per yesterday's closing price, has dropped to | 717/share from...