Infosys Ltd shares climbed over 4% in early trade on Monday, i.e. January 13, after the company after brokerage houses gave a thumbs up to the IT company’s better-than-expected quarterly results for the three months ended December (Q3).
At 9:57 am, Infosys shares were trading at Rs 767.60, up 4%, after hitting the day’s high of Rs 769.70. The stock has risen over 9% in the last one year compared with a 14% rise in the benchmark Nifty 50 index.
Infosys on Friday after market hours said Q3 consolidated net profit jumped 11% compared with the previous quarter to Rs 4,457 crore (up 23.5% year-on-year) on the back of higher other income and lower other expenses. Meanwhile, consolidated revenue during the December quarter grew 2% sequentially to Rs 23,092 crore.
Infosys also revised its full-year constant currency revenue growth guidance to 10-10.5% from 9-10% earlier, while maintaining its EBIT (earnings before interest and tax) margin forecast of 21-23% for FY20.
Separately, Infosys also informed that the audit committee of the company has found no evidence of financial impropriety or executive misconduct in the whistleblower allegations case. In a statement to stock exchanges, Infosys said the committee looked into the allegations contained in the anonymous whistleblower complaints that the company disclosed on 21 October 2019 and determined that the allegations are substantially without merit.
After the results, brokerage firm Citi gave a ‘Buy’ rating for the Infosys stock, while raising the target price to Rs 865 from Rs 830 earlier. According to Citi, Q3 revenue was slightly below estimates, but margin met expectations. Lower attrition and guidance revision were positives. The investigation outcome should give investors more comfort, it added.
Research firm BofAML also gave a ‘Buy’ call on the stock with a target of Rs 825 per share. It highlighted that the large deal signings remained a strong point (at $1.8 billion), but a key negative is deceleration in financial services.
Jefferies also retained its ‘buy’ call but cut the target price to Rs 850 from Rs 915 per share earlier. Infosys results were largely in-line, however some softness in BFSI (banking, financial services and insurance) is expected to continue going ahead, it said.
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