Infosys Stocks Outlook: The sale of IT company Infosys shares is being seen on April 15. The company’s stock has fallen nearly 4 per cent to Rs 1320. Earlier on Wednesday, the stock closed at a price of Rs 1398. In fact, Infosys’ quarterly results have been somewhat weaker than anticipated, due to which the sentiment of investors has deteriorated. The company’s operating profit fell 2.3 per cent to 6440 crore in the fourth quarter, while the margin (QoQ) declined by 90 basis points to 24.5 per cent. Experts expected better performance than this. However Xptra is expected to outperform the company further. For this reason, most of them have advised to invest in stocks.
Revenue growth lower than anticipated
According to brokerage house Motilal Oswal, Infosys’ revenue growth in the fourth quarter was lower than anticipated. In the CC term, revenue growth was 2 per cent on a quarterly basis, while estimates were expected to be over 3 per cent. While USD revenue growth was 2.8 percent during this period, it was expected to be 3.7 percent.
EBIT margin fell 90bp to 24.5 per cent, which is weaker than anticipated. The EBIT margin was estimated to be 24.9 per cent. The company’s operating profit fell 2.3 per cent to 6440 crore. In the fourth quarter, Infosys operating expenses grew by 5.7 per cent to Rs 2707 crore.
5076 crore profit
The company’s net profit during the January-March quarter increased by 17 percent to Rs 5076 crore from the same quarter last year. The net profit of the company during the same months of last year was Rs 4,321 crore. The consolidated revenue of the company during the quarter stood at Rs 26,311 crore. The company’s revenue was Rs 23,267 crore during the same period last year. The company has crossed the revenue of one lakh crore rupees during the financial year 2020-21.
Guidance for FY 2021-22
For the financial year 2021-22, Infosys has kept revenue growth guidance of 12 to 14 percent on the basis of Constant Currency (CC). The company has announced its EBIT margin growth forecast of 22 to 24 per cent for the coming business year. Infosys says that it has added 130 new clients during the review period, which together it now has a total of 1626 clients.
What is investment opinion
According to brokerage house Motilal Oswal, the company is expected to grow further by seeing revenue growth guidance for the financial year 2021-22. However, this boom will remain limited. The brokerage has given a target of Rs 1600, suggesting a buyout in the stock. At the same time, brokerage house MK Global has given a neutral rating on the stock.
Brokerage house CLSA has set a target of Rs 1660, giving a buy rating on Infosys shares. According to CLSA, the revenue CAGR estimate for FY21-24 has been retained at 12 per cent. Brokerage House Credit Suisse has given an outperform rating on Infosys and has raised the share target from Rs 1725 to Rs 1810. According to the report, this quarter has not been impressive for the company and the company is cautious about guidance. However, it is possible to support the stock through dividend and buyback.
(Note: We have given information here based on the company’s quarterly results and brokerage house report. Seeing the risk of the market, take the opinion of the expert before investing.)
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