Shares of Infosys surged by 5% to a new all-time high of Rs 1,843 on the Bombay Stock Exchange (BSE) after its Q1 results beat market expectations.
The Bengaluru-based IT giant reported a consolidated Profit After Tax (PAT) of Rs 6,368 crore for the quarter ending June 30, 2024, reflecting a 7% year-on-year increase. It also increased its revenue guidance for FY25.
Several brokerages have adjusted their target prices for the stock upward.
Infosys recorded revenues from operations of Rs 39,315 crore for the quarter, a 3.6% rise compared to Rs 37,933 crore in the same period last year.
For FY25, the company has projected a constant currency revenue growth of 3%-4% and an operating margin between 20% and 22%.
Brokerage firms have provided varied assessments of Infosys’ performance.
Citi maintained a ‘neutral’ rating while raising the target price from Rs 1,550 to Rs 1,850. The brokerage noted the slight margin improvement and revised guidance, driven in part by acquisitions.
Despite better growth prospects, Citi believes near-term gains may be limited due to the recent 25% increase in share price over the past 45 days.
Brokerage firm Bernstein continues to rate Infosys as ‘outperform’ and increased the target price from Rs 1,650 to Rs 2,100.
The brokerage highlighted Infosys’ strongest performance in ten quarters across revenue, margins, and EPS, along with robust deal momentum amounting to $4.1 billion.
Bernstein sees this as the start of an up-cycle trend with recovering growth and scaling AI deals.
Nomura reaffirmed its ‘buy’ rating and raised the target price from Rs 1,800 to Rs 1,950.
The brokerage pointed out significant new deal wins, which increased by 85% year-on-year, and a 7% rise in EPS.
Nomura attributed the raised revenue guidance to better-than-expected Q1 results, strong deal wins, and the integration of acquisitions, estimating that inorganic contributions will add about 0.7% to the higher guidance.
Meanwhile, Motilal Oswal maintained a ‘buy’ rating, setting the target price at Rs 2,000.
It attributed Infosys’ upgraded FY25 revenue growth guidance to a one-time spike in India business and inorganic factors, but also noted strong deal wins that could bolster medium-term growth.
The brokerage expects Infosys to benefit significantly from increased IT spending in the medium term.