Infosys shares: Shares of Infosys Limited It fell over 9 per cent on Monday after several analysts cut margin estimates on weaker-than-expected earnings for the March quarter. Infosys’ biggest fall in the market was at 9 per cent since March 23, 2020. The stock touched a low of Rs 1,592 per share on Monday. At 9.30 am, the stock was trading at Rs 1,642 on BSE, down 7 per cent from the previous close.
Last week, Infosys Revenue growth of 1.2 percent was reported on a quarterly basis in constant currency terms due to the impact of contracted customer provisions and a lower number of calendar working days.
Infosys margins declined 193 basis points QoQ to 21.6 per cent mainly due to shorter working days (160 bps), contractual customer provision (60 bps) partially negated by pyramid optimization.
Lower margins were due to higher than expected pass-through costs (90 bps margin hit), higher employee costs (30 bps margin hit), increase in travel costs (30 bps margin hit). The company’s management highlighted that with quarterly annual attrition down 5 percentage points in the fourth quarter, wage growth in FY23 could be competitive and higher than last year, especially overseas.
Commenting on the March quarter results, Motilal Oswal Securities in a note to investors said: “Infosys posted weak earnings with slowing growth and meaningful decline in margins. Though growth was sluggish in the quarter, demand remains intact and the order book remains strong. Management’s FY23 growth guidance and higher workforce provide further visibility on demand. ,
Brokerage ICICI Securities expects margin constraints going forward: increase in travel, convenience and communication expenses; Higher onsite/offsite pay revision; and declining employee utilization rates.
“We believe that lowering of revenue growth/margin forecasts will result in a reduction in EPS by at least 5-7 per cent over the consensus estimates. We are confident that Infi is well positioned to capture the market share and Suitably equipped for industry-leading growth. However, increased margin pressure coupled with slower pace of revenue/TCV coupled with macro environment prompted us to retain our REDUCE rating,” ICICI Securities said in the report. has gone.
Should you buy, sell or hold the stock after Q4 results?
Brokerage firm Acme Global said: “We cut FY2013/FY24 estimates by 7.2 per cent/4.9 per cent, factoring in Q4 misses and lower margin guidance. The reduction in operating performance will have an impact on the stock in the near future. We continue to maintain Buy with a revised target price of Rs 1,970 at 28x Mar’24E EPS, given broad-based demand, stable market share gains and strong cash generation, the brokerage said in a note.
Broking firm Sharekhan recommends buying IT stocks because of its strong digital capabilities, healthy capital allocation policy and prudent investment in future required capabilities. “Therefore, we believe that any correction in the stock price will provide good investment opportunities from a long-term perspective. Hence, we maintain Buy rating on the stock with a revised price target of Rs. 2,150,” the brokerage said.
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