Infosys share at 2-year low: What are analysts' recommendations?

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Infosys Q4 Results

IT bellwether Infosys  reported its numbers for the fourth quarter. Notably, both revenues and net profits witnessed growth from the previous year. However, the figures came in below the expectations of the street. Consequently, the Infosys share price has plunged by roughly 12% post its disappointing results.

While revenues witnessed a yearly rise of 16% to Rs 37,441 crores, net profit increased by 8% from the previous year to Rs 6,128 crores.

What was the dividend declared by Infosys? What was the Infosys attrition rate? What was the amount of large deal wins for Infosys in the January - March period? What was the Infosys forecast? Let’s try and decode!

Infosys Q4 Results: Key Insights 

  • Revenue: Revenue from operations rose about 16% led by a robust order book marked by large deal wins of $2.1 billion in the January - March period.
  • Profits: The company reported a profit of Rs 6,128 crore led by strength in the North American market.
  • Margins: Operating Margins witnessed a yearly decline of 0.5% to 21% on account of a rise in expenses.

The Infosys share price has been under pressure in recent times. Notably, the Infosys share price is down 9% in 2023 so far and 15% in the past year. 

Infosys Revenue: 

  • Revenue from operations rose about 16% to nearly Rs 37,441 crores. This can be attributed to the $2.1 billion worth large deal wins in the January-March period.
  • North America and Europe continued to drive bulk of the revenues for the company, contributing to almost 88% of the total revenues.
  • Sectorally, Financial services remained the major contributor at roughly 29% of the total revenues for the company despite the headwinds.
Q4FY23Q4FY22YoY change
Rs 37,441 croreRs 32,276 crore16%

Infosys Segment-Wise Revenue:  

Other than Financial services which contributed about 29% of the total revenues, some other major contributors were Retail (15%), Communication (12%) and Energy (12%) 

Infosys Geography Wise Revenue:  

Despite economic headwinds in the US and Europe due to the recent banking collapse,Infosys continued to draw the bulk of their revenues from these regions. While North America contributed a princely 61% of the total revenues, Europe’s share stood at 27%. India’s share of revenues for Infosys stood at 3% while the Rest of the World contributed roughly 9%. 

Infosys Profits:  

Infosys’ profits for the January-March period came in at Rs 6,128 crores, up 7.7% from the previous year. This can be attributed to the large deal wins of about $2.1 billion and active clients count of 1,872 (up 7.5% from the previous year).

Q4FY23Q4FY22YoY change
Rs 6,128 croreRs 5,686 crore7.7%

Infosys dividend: 

The company proposed a dividend of Rs 17.5 per share. 

Infosys attrition rate:

The attrition rate for Financial Year ‘23 came in at 20.9%. This marked an improvement from the previous year’s figure of 23.9%.

Moreover, the company’s employee count increased by 9.3% yearly to 3,43,234 employees at the end of the fourth quarter. 

Infosys guidance for FY24:

Revenue Growth: 4%-7% in constant currency terms

Operating margin: 20%-22%

Infosys Q4 Results: Analyst View

JP Morgan: Renowned global brokerage JP Morgan has an “Underweight” rating on the stock and slashed its price target on the IT major from Rs 1,500 to Rs 1,200. The firm cited the company's muted commentary for the upcoming quarters as the rational for its downgrade.

CLSA: Top brokerage CLSA has an “Underweight” rating on the stock with a price target cut to Rs 1,550 from Rs 1,800 earlier. The firm highlighted the company's disappointing net profit growth and weak guidance as reasons for its target price cut.

Nomura: The global brokerage has downgraded the company's stock to “Neutral” from “Buy” and has cut the Infosys target price to Rs 1,290 from Rs 1,660 earlier. The firm highlighted that the IT major is expected to be negatively affected by a slowdown in revenue and a reduction in margins in the upcoming years as reasons for its downgrade of the Infosys target price. 

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.

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