Infosys Q1 earnings beat street estimates: Should you buy, sell, or hold?

SUMMARY

IT services company Infosys reported only a 2 percent decline in the June quarter profit at Rs 4,233 crore on strong operating performance. The company surprised the street by giving full-year constant currency revenue growth guidance. The company expects its constant currency revenue growth in the range of 0-2 percent and operating margin at 21-23 percent for FY21. Most brokerages are bullish on the stock. Nomura, CLSA and Citi have a 'buy' call on the stock. Here's what they said:

By Pranati Deva Jul 16, 2020 9:25:29 AM IST (Published)

Nomura on Infosys: The brokerage upgraded the stock to 'buy' and raised its target price to Rs 975 per share. It added that digital positioning, silver linings from CVID bode well for the demand recovery for the company. It further noted that guidance for FY21 growth will be taken positively for the street.

CLSA on Infosys: The brokerage has a 'buy' rating on the stock and raised its target to Rs 1,000 per share from Rs 860 earlier. It also raised FY21/22 EPS estimates by 9 percent.

Citi on Infosys: The brokerage maintained a 'buy' call on the stock with the target raised to Rs 1,000 from the Rs 825 earlier. It also raised EPS estimates by 6-7 percent for FY21-23.

UBS on Infosys: The brokerage maintained a 'neutral' call on the stock with a target at Rs 810 per share. It added that FY21 guidance should help narrow valuation discount to TCS.