Infy trades higher as Morgan Stanley retains ‘overweight’ call, awaits FY25 revenue guidance

Infosys shares traded 1.3 percent higher at the opening on April 1 as Morgan Stanley retained its ‘overweight’ rating on the stock ahead of the IT services major’s quarterly earnings date.

The brokerage said that the fourth quarterly earnings data and the revenue guidance for FY25 will be a key catalyst for the stock. Morgan Stanley’s target price of Rs 1,700 apiece implies an upside of 13.48 percent from the previous session’s closing price.

At 9.20am, the Infosys shares were quoting Rs 1,516.6 on the NSE, higher by 1.3 percent.

In the base case scenario, Morgan Stanley foresees a 3-6 percent revenue growth guidance in constant currency terms for Infosys. In the base case, Infosys’ growth hinges upon strong deal wins in FY24, with a potential bounce-back in H2, implying better conversion of deal winds into revenue.

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On March 7, Morgan Stanley raised target prices of top and mid-tier IT services companies, while maintaining largely favourable ratings. It remains bullish on the IT sector, saying the set-up looks positive despite heady valuation multiples.

The brokerage has stuck to its key calls TCS and Infosys, where the growth visibility is currently the highest. The margin expectations for the companies appear to be reasonable.

Over the past six months, the Infosys shares have risen around 6.3 percent, underperforming India’s frontline indices. In comparison to the IT services player, the Nifty 50 has gained around 14 percent in the same period.

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