Infosys share price tanked 9% to Rs 1311.60 today after the Indian IT major revised its FY24 CC revenue growth guidance downward to 1-3.5% compared to 4-7% earlier. The company’s Q1 results missed market estimates on multiple fronts. Infosys’ net profit grew 10.9% on-year to Rs 5,945 crore for the June quarter compared with Rs 5,360 crore in the same quarter last year. Analysts were largely expecting a 14-18% growth. Infosys stock has gained 3% in the last one month and has fallen nearly 12% in the past one year.
Should you buy, sell or hold Infosys stock?
Choice: ADD – Target Price: Rs 1570
“There is an extremely strong pipeline of large deals mainly consisting of cost and efficiency programs for clients along with consolidation opportunities. Robust investment in AI shall fetch good medium-term visibility and attract higher margins. Based on the challenging market conditions and management’s conservative guidance over the medium term, we have lowered our EPS estimates for FY24E and FY25E. We downgrade our rating to ADD and value the stock at a revised multiple of 24x SEP2024E EPS to arrive at our target price of Rs 1,570,” said analysts at Choice Equity Broking.
Nuvama: HOLD – Target Price: Rs 1380
“Infosys’s successive disappointment in guidance is a shocker, particularly given it is accompanied by strong deal flow and in-line results. We believe most of the problems faced by Infosys are company-specific, and not to be seen as a read-across for the sector. We, hence, expect Infosys to underperform peers in the near-to-medium term,” said analysts at Nuvama.
Infosys Stock Technical Outlook
Infosys stock may oscillate between Rs 1250-1500 in short to medium term
“Infosys has reversed from a descending trendline hurdle on the weekly charts. However, the stock is currently trading above the previous swing low of Rs 1250. On long-term charts, the stock is trading comfortably above the 15-year ascending trendline breakout area suggesting the structure remains strong for the long term. In the short to medium term, the stock may oscillate between Rs 1250-1500 range. Long-term investors can use this dip as a buying opportunity with a time horizon of 18-24 months for fresh lifetime high levels in Infosys,” said Gaurav Bissa, VP, InCred Equities.