Why Infosys share price can still rise 14%

“Given the global headwinds, the outlook for FY2024 looks uncertain. However, we believe that the structural growth story for the Indian IT sector remains intact. We maintain a Buy rating on Infosys with unchanged PT 1,730 given its strong deal pipeline, its end-to-end capabilities and skills in the areas of digital, analytics, automation and Cobalt Cloud. We recommend investors to take a staggered approach to investing in the stock from a long-term perspective, Sharekhan said in a report.

some other The brokerage has also maintained a positive outlook on the stock and the company posted its third quarter results.

Here are some of the key positives and negatives from Infosys results compiled by the brokerage:

major positive

– Reported large deal TCV in Q3 FY2023 was strongest in last 8 quarters at $3.3 billion

– FY23 revenue growth guidance raised to 16-16.5% CC

– LTM attrition moderated by 280 bps sequentially. The attrition rate decreased to 24.3% in Q3 FY2023, compared to 27.1% in Q2 FY2023.

major negative

EBIT margin was flat sequentially at 21.5% and was below our estimate of 22.4%.

– Utilization rate of 81.7% lowest in last 10 quarters

The key risk to brokerage estimates is appreciation Rupee Or adverse cross-currency movements, slow pace in deal closures, and even local talent supply constraints in the US will impact earnings.

Infosys boosted it Full year revenue growth forecast Its quarterly earnings missed analysts’ estimates as wage costs rose amid a strong deal pipeline.

The Bengaluru-based company said it expects revenue to grow at 14-16% in constant currency in the current fiscal, up from the 13-15% pace estimated about three months ago. Infosys, however, retained its operating margin forecast for March 31 at 21-23%, though the management expects it to be at the lower end of the range.