Infosys Shares Fall After Q4 Revenue Miss, Guidance Disappointment

Shares of Infosys Ltd. declined nearly 3% Friday after the tech giant's revenue declined in the fourth quarter and guided for a modest revenue increase in FY25.

India's second-largest IT giant's revenue declined 2.3% on sequential basis to Rs 37,923 crore, compared to Rs 38,576 crore estimate by a Bloomberg survey.

However, despite a decline in its revenue and operational profit, the IT service company posted a Rs 7,975 crore net profit during the quarter on the back of an income tax refund.

• Revenue down 2.3% to Rs 37,923 crore (Bloomberg estimate: Rs 38,576 crore).

• EBIT down 4.3% to Rs 7,621 crore (Bloomberg estimate: Rs 7,994.7 crore).

• EBIT margin at 20.1% versus 20.5% (Bloomberg estimate: 20.70%).

• Net profit up 30.5% at Rs 7,975 crore (Bloomberg estimate: Rs 6,162 crore).
  
  

• Motilal Oswal maintained a 'buy' on Infosys with a target price of Rs 1,650 piece, implying an upside of 16%.

• Strong deal wins is likely to improve visibility for FY26 growth, the brokerage said.

• Motilal Oswal expects FY25 dollar constant currency revenue growth of 2.5% YoY.

• Infosys's FY25 EBIT margin is likely to be at 21.1%, up 40 basis points YoY

• The brokerage lowers FY25/FY26 EPS estimates by 5-6% on weak Q4, muted FY25 revenue growth guidance.

• Motilal Oswal expects FY25 USD CC revenue growth of 2.5% YoY.

• Citi Research maintained a 'neutral' rating with revised price target of Rs 1,550. The price target implied an upside of 8.7%.

• The brokerage believes the correlation between TCV and growth is limited for the sector

• It recommend to 'buy' Infosys stock at dips to Rs 1,350 levels.

• Citi Research retained pair trade of UW TCS and OW Infosys.

• Infosys 1QFY25 should be better on the back up ramp up of deals.

• Jefferies maintained a 'buy', while it cut target price to Rs 1,630 apiece from Rs. 1,740 apiece.

• The target price implied an upside of 14% as the stock trade below its 5-year median.

• Infosys's revenue missed estimates mainly due to contract re-negotiation and reduction in scope.

• Strong deal wins will provide the software services giant comfort over FY24-FY27.

• They expect the margins to rise to 21.1% by FY27.

• The company may offer higher dividends vs buybacks, which should support multiples.

The scrip fell as much as 2.85% to Rs 1,378.75 apiece and pared losses to trade 2.69% lower at Rs 1,381.1 apiece, as of 9:20 a.m. This compares to a 0.66% decline in the NSE Nifty 50 Index.

Infosys has risen 12.08% in 12 months. The relative strength index was at 22.

Out of 46 analysts tracking the company, 32 maintain a 'buy' rating, seven recommend a 'hold,' and seven suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 16.0%.