Infosys Ltd. share price target

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.

Infosys has reported revenue of US$4,554mn, decline of 3.2% QoQ CC, much lower than our/consensus estimates of +0.1%/0.3% QoQ CC. This resulted in miss in FY23 revenue growth at 15.4% YoY CC vs guidance of 16-16.5%.