Brokerages cut target prices on Infosys after muted guidance
Brokerages adjust Infosys' share targets post revenue cut. Stock at ₹1,411.95, target post Q4: ₹1,582.12 (12% upside). Analysts note slow discretionary demand despite sector bottoming out, Infosys' attractive valuation.
Mumbai: Analysts at most of the top brokerages reduced or retained on following the company's reduced revenue guidance following its March quarter results. The stock fell 0.51% to close at ₹1,411.95 on Friday.The average analyst price targets on after the fourth quarter results stood at ₹1,582.12, implying an upside of 12% over Friday's closing.
Analysts said that weaker-than-expected guidance for FY25 and the lack of signs of revival of discretionary demand led to reduced revenue despite the deal wins.
Nomura said that given the uncertain macro conditions, there has been no change in client sentiment with respect to technology spends for FY25 compared to FY24 as clients remained focused on cost optimisation and upfront return on investments.
Analysts at BNP Paribas said that despite the cautious management guidance, the company expects a recovery in the BFSI segment, which could be a catalyst for revenue growth and margin surprise. They added that in terms of one-year forward price to earnings basis, Infosys is attractive at 20% discount to its peer Tata Consultancy Services (TCS).
"Adjusted for one-offs, Infosys delivered a solid EBIT performance, reflecting its strong cost efficiencies. While discretionary demand remains slow, the sector appears to have bottomed, and valuations are already pricing in most of the risks," said analysts at BNP Paribas.
Source: Stocks-Markets-Economic Times
