Infosys share falls over 5% post Q4 earnings; here’s what brokerages say

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Infosys share fell over 5% today despite the IT firm announcing a 17.5 per cent rise in net profit  for quarter ended March 2021. Share of Infosys lost 5.59% to Rs 1320 against previous close of Rs 1,398.60 on BSE.

The stock opened with a loss of 3.14% at Rs 1,354.70. The share trades higher than 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages. However, the share has risen 6.74% since the beginning of this year and 109% in one year. Market cap of the IT firm fell to Rs 5.71 lakh crore on BSE.

In March quarter of last fiscal, the IT major reported consolidated net profit of Rs 5,076 crore. On a sequential basis, net profit declined 2.3 per cent over the previous quarter.

Rrevenue rose 13.1 per cent YoY to Rs 26,311 crore during the quarter under review, while it climbed 1.5 per cent on a quarter-on-quarter (Q0Q) basis.

The IT major also announced a Rs 9200-crore share buyback programme amounting to 14.87 per cent of the total paid-up capital of the company, for a price not exceeding Rs 1,750 per share through the open market route.

At the beginning of FY20, the company had changed its capital return policy, with an aim to return 85 per cent of the cash back to shareholders.

YES Securities  has given a buy call on Infosys stock with a target price of Rs 1,560 an upside of 11.6%.

“It is to be noted that there was adverse impact of INR appreciation in reported INR revenue for the quarter; and also, the revenue growth for the quarter was impacted by some time being taken in ramping up large deals. EBIT margin declined by 94 bps QoQ to 24.5% on expected lines, led by wage hike in the quarter The firm gave a strong FY22 guidance of 12-14% revenue growth in cc terms with operating margin band of 22-24%,” the brokerage said in a note.

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Motilal Oswal has given a buy call on the stock with a target price of Rs 1,600, a 14% upside to the current level.

“We have cut our FY22E/FY23E EPS estimate by 4%/4% given the 4.5% miss on PAT in 4Q and moderate guidance (below our expectation). We continue to see INFO as a key beneficiary of a recovery in IT spends in FY22E, given its capabilities around Cloud and Digital transformation. Leading operational performance in FY21 and strong deal wins should translate into strong outperformance in EPS growth (v/s the sector). Reiterate top Buy, ” the brokerage said.