Infosys - To Outperform Its Peers In Q2, With An Upside Risk To Its 3-4% FY25E Guidance: HDFC Securities

HDFC Securities Institutional Equities

We expect Infosys Ltd. to outperform its peers in Q2 FY25E growth, with an upside risk to its 3-4% FY25E guidance (our estimates are slightly above the upper range).

Positive markers include improved demand in segments of banking, financial services and insurance, market-share gains in deals (notably within the communications vertical), deal pipeline replenishment, and better hiring trends.

The enterprise revenue growth trajectory shows a mild improvement, which may bolster recovery in discretionary spending. Even if quarterly new large deal bookings moderate to under $2 billion, we anticipate growth acceleration driven by the increasing contribution from sub-$ 50 million deals.

Our revenue growth estimates for FY24-27E assume a similar incremental annual growth rate as the last five years' average. The recent re-rating of valuation multiples has ‘partially’ priced in these positives.

We maintain our Add rating on Infosys with a target price of Rs 2,010, based on 25 times Dec26E earnings per share.

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