Infosys Gains Momentum with Mega Deals, Sharekhan Recommends Buy
Infosys, one of India’s leading IT companies, is poised for growth, according to Sharekhan’s recent research report. The company has received a buy rating with a target price of Rs 1690, as it continues to strengthen its deal momentum.
Key Highlights from Sharekhan’s on Infosys Report:
- Robust Deal Momentum: Infosys has reported the signing of several large and mega deals ranging from $1.5 to $2 billion in the July-September 2023 period. These substantial deals are expected to contribute significantly to the company’s growth.
- Benefitting from Vertical Recovery: Infosys is well-positioned to benefit from the likely recovery in highly impacted sectors such as BFSI (Banking, Financial Services, and Insurance), Communication (including a $1.6 billion deal win with an MNC telecom company), and Hi-tech. This recovery is expected to be driven by both recent deal wins and the ramp-up of the deal pipeline.
- Positive Outlook for IT Industry: As global uncertainties gradually subside, there is an anticipated acceleration in discretionary spending, which will further boost growth for IT companies. Despite the uncertain macroeconomic environment, Infosys’s strong competitive strengths are expected to provide resilience to its revenue growth profile.
- Margin Expansion: Infosys is expected to experience margin expansion, aided by improvements in operational levers.
Sharekhan’s Outlook:
The recent mega deal wins have improved growth visibility for Infosys. As a result, Sharekhan has upgraded Infosys to a “Buy” rating with a revised target price of Rs 1690. This revised target price reflects slightly better multiples and the rollover of the price-to-earnings (PE) multiple to the September 2025 earnings per share (EPS) estimate.
Infosys remains well-positioned to secure large deals and defend its market share due to its diversified global presence, well-spread revenue streams across various industry verticals, and a sharp focus on strategic clients. Currently, the stock trades at 21.6x/19.1x its FY25/26E EPS.
In Summary:
Infosys is expected to continue its growth trajectory, driven by its strong deal pipeline, recovery in key sectors, and a positive outlook for the IT industry. Sharekhan’s buy rating reflects confidence in Infosys’s ability to capitalize on these opportunities and deliver value to investors.
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