Buy Infosys, target price Rs 2100: Emkay Global

Emkay Global has buy call on Infosys Ltd. with a target price of Rs 2100. The current market price of Infosys Ltd. is Rs 1882.9. Time period given by analyst is one year when Infosys Ltd. price can reach defined target.

Infosys Ltd., incorporated in the year 1981, is a Large Cap company (having a market cap of Rs 792835.18 Crore) operating in IT Software sector.

Infosys Ltd. key Products/Revenue Segments include Software Development Charges and Software Products for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 30126.00 Crore, up 5.64 % from last quarter Total Income of Rs 28518.00 Crore and up 19.83 % from last year same quarter Total Income of Rs 25140.00 Crore. Company reported net profit after tax of Rs 5428.00 Crore in latest quarter.

Investment Rationale
The brokerage expects 2.4% QoQ USD revenue growth in Q3FY22 after factoring in 60bps cross-currency headwinds. EBIT margins are expected to remain flat in Q3FY22. Key monitorables: 1) FY22 guidance - we expect the company to revise its FY22 revenue growth guidance to 17.5-18.0% CC YoY (current 16.5-17.5%), while retain its EBITM guidance of 22-24%; 2) large deals intake; 3) any changes in organizational structure post retirement of COO (Pravin Rao); 4) management commentary on: (i) CY22 IT budget, (ii) steps taken to manage supply-side challenges and available levers to defend margins, (iii) demand environment in BFSI, Manufacturing, Retail, and Communications, (iv) pricing environment, (v) deals pipeline and deal closure momentum.

Promoter/FII Holdings
Promoters held 13.12 per cent stake in the company as of 30-Sep-2021, while FIIs owned 33.46 per cent, DIIs 15.65 per cent.