Infosys Ltd. share price target

Given the company's medium-term challenges on demand and uncertain supply-side constraints, we expect Infosys to report sluggish growth in FY24. We recommend investors SELL on the stock until uncertainties settle down.

We recommend a SELL rating on the stock and assign a 20 x P/E multiple to its FY25E earnings of Rs 63.7/share to arrive at a TP of Rs 1,300/share, implying an downside of 11.5% from the CMP.

Infosys posted an in-line quarter. Revenue grew 1% in cc terms QoQ. EBITDA margin declined by 70bps QoQ to 20.8%. Infosys sharply cut its FY24 revenue growth guidance to 1-3.5% cc YoY (earlier 4-7%), implying 0.2-1.8% CQGR over Q2-Q4, on lower than expected volumes due to ramp-downs in discretionary spend, coupled with mega-deal volumes decreasing on delayed signings and longer ramp-up time due to regulatory approvals and transitions.

Given the company's medium-term challenges on demand and uncertain supply-side constraints, we expect Infosys to report moderate growth in FY24. We recommend investors SELL on the stock until uncertainties settle down.