Infosys Ltd shares witnessed a deep fall in stock prices after the ADR effects in US markets past week. The stock is down around 11 percent today trading at a price of Rs 1,237. It hit the 52-week low mark today at Rs 1,185.30. In the last five trading sessions itself, the stock has dipped around 13 percent.
Looking at the Nifty IT index, the same is exhibiting a downfall of about 5.5 percent and currently stands at Rs 26,780. The company is fundamentally strong company but has seen such movements because of the bearish sentiments in the markets circling the results not meeting the expectations set.
ICICI Direct came up with a ‘Buy’ recommendation on the stock with a target price of Rs 1,600 indicating an upside of around 30 percent as compared to the current price levels.
Infosys is a leading global IT services provider leveraging its offshore outsourcing model leading to more than 60 percent of revenues from the North American segment. The company mainly offers traditional IT services such as managed services and cloud infrastructure services, consultancy, and business process outsourcing as a service (BPaaS).
Quickly going through the financials, the company, during FY22-23, has seen a reduction in revenues and net profits. Revenues have moved from Rs 38,320 crores in Q3 to Rs 37,440 crores in Q4. Net profit figures, in congruence with the pattern showed by revenues, have moved down from Rs 6,590 crores in Q3 to Rs 6,135 crores in Q4.
Despite the above fall in numbers, the company has been able to maintain good profitability metrics with growth in ROE and ROCE percentages. ROE of the company shifted from 29.39 percent in FY21-22 to 32.3 percent during FY22-23. Moreover, the ROCE numbers moved from 39.96 percent in FY21-22 to 44.58 percent in FY22-23.
As per the data available for Q3 FY22-23, the company’s promoters hold a 15.11 percent stake, whereas, FIIs hold a 36.28 percent in the company.
Written by Amit Madnani
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