Infosys Q3 result beat estimates; what should investors do now?

Citi has maintained buy on Infosys but cut the target price to Rs 1,665 per share. The company has reported an in-line EBIT, which may have been aided by 3rd party items bought for service delivery, the brokerage said.

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Infosys share price will remain in focus on January 13, a day after company came out with strong set of numbers for the quarter ended December 2022.

The country’s second-largest IT firm on Thursday reported a 13.4 percent rise in its consolidated net profit for the quarter ended December 2022 at Rs 6,586 crore, as against Rs 5,809 crore in the same quarter last year.

The company’s consolidated revenue from operations increased 20.2 percent to Rs 38,318 crore as against Rs 31,867 crore in the corresponding quarter last year, it said in an exchange filing.

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Here is what brokerages have to say about stock and the company post December quarter earnings:

Citi

Research house Citi has maintained buy on the stock but cut the target price to Rs 1,665 per share.

The company has reported an in-line EBIT, that may have been aided by 3rd party items bought for service delivery.

The service delivery would also have been a headwind to margin.

The Q4 guidance suggests caution as lower FY24/25 EPS estimates by 1 percent & target multiple to 25x given challenging macro. However, sector view remains cautious, reported CNBC-TV18.

Bernstein

Brokerage house has maintained outperform rating on the stock with a target at Rs 1,810 per share.

The company has delivered strong quarter with revenue beat, strong order book & raised FY23 guidance.

The company continues to be a growth leader, and gaining market share amongst peers, reported CNBC-TV18.

JPMorgan

Research firm JPMorgan has kept neutral rating on the stock with a target at Rs 1,700 per share.

The underlying growth slowdown accelerates, while underlying services growth impacted by furloughs & demand softness in select industries.

The Q4 guidance suggests growth moderation will deepen over CY23, while company’s growth has edged closer to TCS in Q3 on YoY basis.

However, the key positive is growth in large deals and continue to foresee growth moderation over the rest of CY23.

JPMorgan expect growth to reset to 6-8 percent CC YoY over FY24, reported CNBC-TV18.

Morgan Stanley

Broking house has kept overweight rating on the stock with a target at Rs 1,670 per share.

There was a resilience in revenue growth & good momentum in new large deal win TCV.

The margin missed the expectations, while recovery lagging the peers, reported CNBC-TV18.

CLSA

Research firm has kept buy rating on the stock with a target at Rs 1,800 per share as the Q3 revenue growth was ahead of estimates, with higher-than expected pass-through revenue.

The large deal wins were healthy.

The minor upgrade to FY23 revenue growth guidance points to a stable near-term demand outlook, while FY24/FY25 EPS forecasts are broadly unchanged.

Infosys is a preferred pick & part of the CLSA India focus portfolio, reported CNBC-TV18.

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