Brokerages bullish on Infosys after robust Q3 results

Brokerages bullish on Infosys after robust Q3 results

Mumbai: Brokerages have raised target prices on Infosys after the IT major reported better-than-expected results in the quarter ended December 2020 and hiked revenue and margin guidance for the ongoing financial year.

Shares of Infosys ended down 1.2 per cent despite the strong result as the stock has gained close to 19 per cent in the last one month.

The company’s revenue rose 5.5 per cent from the previous quarter to Rs 25,927 crore while profit increased 7.3 per cent from the quarter-ago period to Rs 5,197 crore.

CLSA, Emkay, Kotak Institutional, Investec, HSBC, Jefferies and Motilal Oswal raised target price by 4.5-15 per cent.

“We believe 3QFY21 revenue and deal-win momentum will help Infosys exit FY21 at the high end of the guided growth range and provide a base for a double-digit revenue CAGR during FY22-23. A ramp-up in the Daimler deal, expected in 2QFY22, could add an incremental 3 per cent to the FY22 growth rate,” said CLSA. The brokerage has raised its target price on the stock to Rs 1,620 from Rs 1,480.

While most brokerages maintained a buy rating, Investec has downgraded the stock to hold on potential risk to margins and a less favourable risk-reward. The brokerage though continues to prefer Infosys over TCS.

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