Infosys Q2 Results Review - Revenue Beat Drives Guidance Upgrade; Margin Slips: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Infosys Ltd. reported revenue of $4.9 billion up 3.1% constant currency QoQ (our estimate: of +2.4%), led by ramp-up of deals in E&U (+5.4% QoQ) and 80 bps gain from in-tech integration. However, operating profit margin remained flat at 21.1% QoQ (our estimate: 21.8%), mainly due to higher variable pay that offset efficiency gains.The company upgraded its FY25E CC revenue growth guidance to 3.75%-4.5% range (versus 3-4% earlier) on the back of improved spending across BFSI sub-segments. OPM guidance is retained at 20-22%. We tweak our FY25/FY26E EPS estm by -3% each, factoring in need for increased investment in S&M to drive total contract value (down 8% trailing twelve months basis). Q2 performance/commentary suggests Infosys is set to deliver growth outperformance over TCS on FY24-FY26E basis and thus should command at-par valuation (versus five-year Avg discount of 14%). We retain our ‘Reduce’ rating on revised target price of Rs 2,020 (valued at 26 times FY27E)..Click on the attachment to read the full report:.Infosys ADRs Falls Nearly 3% After Q2 Result Announcement.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Infosys Q2 Results Review - Revenue Beat Drives Guidance Upgrade; Margin Slips: Dolat Capital

The brokerage expects operating profit margin to remain flat QoQ on account of furloughs impact to be offset by some reversal in third-party cost.

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Infosys Q2 Results Review - Revenue Beat Drives Guidance Upgrade; Margin Slips: Dolat Capital

The brokerage expects operating profit margin to remain flat QoQ on account of furloughs impact to be offset by some reversal in third-party cost.

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