Infosys Ltd. share price target

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.

Infosys reported a largely in-line operating performance, but cut in FY24 revenue guidance is a negative surprise. Revenue grew 1% QoQ CC (I-Sec: 0.8%, cons: 0.8%) and 4.2% YoY CC led by strong growth in manufacturing, partially offset by weakness in BFSI, retail and communication.

Key spending areas in FY23 included cloud, generative AI, cybersecurity, IoT, and immersive technologies

Infosys’ (INFY) Q1FY24 result is likely to be weak and that is largely known to the street. We believe INFY’s FY24 revenue guidance of 4-7% YoY CC is healthy because CQGR of 2.3-2.9% implied by mid to high end of the guidance is higher than INFY’s pre-covid CQGR of 2.2%.

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.