Infosys - Q1FY21 Result Update - ICICI Securities

Infosys reported a healthy set of Q1FY21 numbers both on the revenue and margin front. Further, the Q1FY21 performance was better than TCS' Q1FY21 numbers. The company reported a 2.4% QoQ dip in dollar revenues (above our estimate of decline of 5.5% QoQ) vs. TCS that reported 7.1% QoQ dip in dollar revenues. In terms of margins, EBIT margins improved 149 bps to 22.7% (above our estimate of 20.9%) vs. TCS that reported 149 bps dip in margins. The company's large deal signings have increased 5.5% QoQ to US$1.74 billion. Digital revenues have increased 3.6% QoQ, 24.1% YoY to US$1389 million and now contributes 44.5% of total revenues. In terms of guidance, the company expects 0-2% growth in revenues in constant currency terms and operating margins in the range of 21-23%.

Valuation & Outlook

Infosys has shown a visible improvement in performance since the change in management. We expect the company to continue to make steady improvement in financials in coming quarters. Digital acceleration, large deal wins vendor consolidation and cost rationalisation remain key long term drivers. Further, Infosys has maintained healthy cash flow generation and has a consistent dividend payout policy. We remain positive on the stock and maintain our BUY rating on the stock with a target price of Rs. 1000/share.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Infosys_Q1FY21.pdf

Shares of INFOSYS LTD. was last trading in BSE at Rs.831.45 as compared to the previous close of Rs. 783.2. The total number of shares traded during the day was 1272970 in over 30111 trades.

The stock hit an intraday high of Rs. 848 and intraday low of 795.35. The net turnover during the day was Rs. 1056949561.

Source : Equity Bulls

Keywords