Infosys share hits record high after firm raises revenue guidance for FY22
Infosys share touched a fresh record high today after the Bengaluru-based IT firm raised its revenue guidance for FY22 in its earnings performance for the quarter ended June 2021.
Share of Infosys rose 1.29% to an all-time high of Rs 1,597.25 against previous close of Rs 1,576.90 on BSE. The large cap stock has gained 2.88% in the last 2 days.
Infosys share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
Infosys stock has gained 91% in one year and risen 26.51% since the beginning of this year.
Total 2.75 lakh shares changed hands amounting to turnover of Rs 43.56 crore on BSE.
Market cap of the firm rose to Rs 6.75 lakh crore. The IT stock fell to a 52-week low of Rs 795.35 on July 15, 2020.
Infosys reported a nearly 23 per cent rise in net profit for the June quarter on Wednesday. Net profit in last quarter stood at Rs 5,195 crore against Rs 4,233 crore in the year-ago period.
The IT behemoth raised its revenue growth outlook for the full fiscal to 14-16 per cent buoyed by its robust deal pipeline and “strong” Q1 performance.
Infosys chalks out new plan; to allow 20-30% employees to work from office soon
Revenue from operations rose 17.8 per cent to Rs 27,896 crore in the first quarter of FY22 from Rs 23,665 crore in the year-ago period.
Infosys raised its revenue guidance for FY22 to 14-16 per cent from the previous outlook of 12-14 per cent. The firm said its confidence stemmed from strong Q1 growth, good order wins and robust deal pipeline.
In the June quarter, Infosys’ large deal flows remained strong with total contract value (TCV) of $2.6 billion.
Infosys reports Q1 profit at Rs 5,195 cr; misses expectations
“…we grew at the fastest pace in Q1 in a decade, at 16.9 per cent year-on-year and 4.8 per cent quarter-on-quarter in constant currency We remain comfortable with our ability to support our clients in their digital transformation journey with a strong start to the financial year,” Infosys CEO and Managing Director Salil Parekh said.
This along with a strong deal pipeline, gives the company confidence to increase revenue growth guidance to 14-16 per cent, he added.
Infosys announced its earnings after market hours on Wednesday. Shares of Infosys closed at Rs 1,576.90 apiece, up 2.07 per cent from the previous close on BSE.
Here’s a look at what brokerages and analysts said about the Q1 earnings performance of the IT player.
Motilal Oswal reiterated its buy rating on the stock.
“We expect Infosys to deliver another year of an ongoing guidance raise as the current one does not fully factor in strong technology demand and execution of its record high deal wins. We have cut our FY22E/FY23E EPS estimate by 3.2%/1.6% to encompass margin pressure due to ongoing supply crunch in the industry and expected increase in travel expenses. We continue to view Infosys as a key beneficiary of a recovery in IT spends in FY22, given its capabilities around Cloud and Digital transformation. We value Infosys at 27x FY23E earnings per share and reiterate our buy rating.”
Jyoti Roy – DVP- Equity Strategist, Angel Broking said, “Post the Q1FY22 results the management has also increased their revenue growth guidance to 14-16% in constant currency terms while margin guidance has been retained at 22-24% for FY2022. At current levels Infosys is trading at P/E multiple of 25xFY23 EPS estimate of Rs. 63.0 which is at a discount to some of the mid cap IT stocks. We expect Infosys to register strong revenue/PAT growth of 18.1%/17.5% over FY2021-FY2023 and maintain our positive view on the stock.”
Piyush Pandey, Lead Analyst – Institutional Equities at YES Securities said, “Infosys’ revenue growth is slightly better than expected at 4.7% QoQ in dollar terms with constant currency growth at 4.8% QoQ. Q1 growth was broad-based with some softness in communication segment. EBIT margin fell 80 basis points QoQ to 23.7% due to higher employee and sub contracting cost.
The IT firm’s sequential PAT growth was muted due to higher tax outgo and higher employee cost. Large deal win remained strong at $2.6 bn. The firm added net 8,000 employees during the quarter.”