The shares of IT-major Infosys Ltd. shot up more than 5% today on the bourses to touch their day’s high of Rs. 1,494. The stock came down slightly and eventually closed at Rs. 1,477 per share, up 4.02% for the day.
The surge in stock price comes after India’s second-largest IT services company clocked a better-than-expected 11% year-on-year (Y-o-Y) jump in consolidated net profit at Rs. 6,021 crores for the quarter ending September 2022.
Operational revenue climbed to Rs. 36,538 crores, registering an impressive growth of 23.4% from Rs. 29,602 crores during the same period last year (Q2FY22). On a quarter-on-quarter basis, it increased by 6% while profits advanced by 12.3%.
As for the revenues in constant currency terms, they rose by 18.8% Y-o-Y and 4% Q-o-Q. Digital revenues during the quarter accounted for 61.8% of the total revenues, rising 31.2% Y-o-Y in constant currency.
At $ 2.7 billion, the total contract value (TCV) stood highest in the last seven quarters. The management has raised FY23 guidance for revenue to 15-16% from 14-16% earlier.
The board has announced an interim dividend of Rs. 16.50 per share making the interim dividend payout Rs. 6,940 crores. During the quarter, the operating margin improved sequentially by 1.4% to 21.5%.
In addition to this, the company also announced a buyback of shares via an open market route. Shares worth Rs. 9,300 will be purchased for a price of up to Rs. 1,850 a piece.
Updating on the results, global brokerage firm Jefferies commented, “Infsoys’ Q2 results were above estimates driven by margin expansion. Deal wins at a seven-quarter high and healthy hiring trends offer comfort on growth. Infosys’ strong deal bookings and consistent execution provide comfort amidst an uncertain macro. While valuations at 23x are still at a premium to 10-year average levels of 19x, we believe it is justified given the superior growth outlook.”
Analysts at Edelweiss have set a price target of Rs. 1,891 per share for Infosys stock. This translates to a potential upside of 28% for the investors.
Written by Vikalp Mishra
