Infosys stock slumps 5% most since August 21, 2017; NSE IT index falls 1%

Wipro, TCS and HCL Technologies ended with gains of more than half a per cent

 

 

Share Market News » Infosys shares fell 4.55 per cent on Thursday, the most since August 21, 2017. The stock ended at Rs 1,284 after climbing to a lifetime high of Rs 1,354 on Tuesday.
 
The stock is still up 24 per cent this year. In comparison, the benchmark Nifty has gained two per cent and the Nifty IT index, a gauge for the performance of technology stocks, has gained 20 per cent in 2018.

The NSE IT index on Thursday fell just 1.1 per cent as other heavyweights Wipro, TCS and HCL Technologies ended with gains of more than half a per cent amid the rupee closing at a new low of 68.94 against the dollar.

The exact reason for the sell-off in the stock, which caused a market cap erosion of Rs 131 billion, was not evident.

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Infosys Stock Price

About Infosys Limited - Company History

Infosys Ltd is a global technology services firm that defines designs and delivers information technology (IT)-enabled business solutions to their clients. The company provides end-to-end business solutions that leverage technology for their clients including technical consulting design development product engineering maintenance systems integration package-enabled consulting and implementation and infrastructure management services. The company also provides software products to the banking industry.

They have developed Finacle a universal banking solution to large and medium size banks across India and overseas. Infosys BPO is a majority owned subsidiary. Through Infosys BPO the company provides business process management services such as offsite customer relationship management finance and accounting and administration and sales order processing. The company is having marketing and technical alliance with FileNet IBM Intel Microsoft Oracle and System Application Products. Infosys Ltd is a public limited and India's second largest software exporter company was incorporated in the year 1981 as Infosys Consultants Pvt Ltd by Mr.N.R.Narayana Murthy at Karnataka.

The company was started by seven people with the investment of USD 250. The company became a public limited company in the year 1992. The company was the first Indian company to be listed on the NASDAQ in the year 1999. Infosys also forms a part of the NASDAQ-100 index. Continuously in the year 2001 2002 and 2003 the company wins the National award for excellence in corporate governance conferred by the Government of India. 

News Source : BS

Infosys hits new high; stock surges 25% so far in 2018

With Rs 2.83-trillion market capitalisation, Infosys is 6% or Rs 164 billion away to touch Rs 3-trillion mark.

 

Stock Market News » Shares of Infosys hit a new high of Rs 1,298 per share, up 2% on the BSE in early morning trade in an otherwise flat market. With Rs 2.83-trillion market capitalisation, Infosys is 6% or Rs 164 billion away to touch Rs 3-trillion mark.
Thus far in the calendar year 2018 (CY18), Infosys has outperformed the market by gaining 25% as compared to 3.3% rise in the S&P BSE Sensex.

Infosys, the country's second largest IT services company, on Wednesday after market hours said that it is scheduled to announce its financial results for first quarter (April-June) of current fiscal 2018-19 (FY19) on July 13.

Infosys has set a 3-year roadmap stabilize in FY19, build momentum in FY20 and accelerate in FY21. The company outlined that FY19 is going to be a year of investments in the area of sales, scaling up digital capabilities, localization and employee re-skilling.

“Infosys has done a good job on margins and revenues in FY18 considering it was a year of change in management in the company. Although the investments will impact the margin profile in the short term, we believe Infosys is well placed in the medium term to ride the digital wave. We see stability returning to the company and a rapid adoption of new technologies. With industry tailwinds, we believe Infosys should be able to grow revenues around industry growth in FY19 and do better from FY20 onwards,” analysts at Antique Stock Broking said in analyst meet update. However, the stock was trading above its 12-month target price of Rs 1,265.

The brokerage firm Sharekhan believes the valuation gap with Tata Consultancy Services (TCS) would reduce as Infosys is catching up the earnings growth and other financial parameters along with consistent execution under stable leadership. TCS has rallied 38% thus far in CY18.

Given the significant growth opportunity in the agile digital business, Infosys is well on track to execute strategy for digital growth, the brokerage firm said in recent note with upgrade rating on the stock of Infosys to Buy from Hold with a revised price target of Rs 1,420.

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Infosys Q4 Results : Execution rigour is the mantra for the company going forward

The company should be able to hold on to its margins, a function of greater revenue per employee and lower headcount growth vis-a-vis revenue growth.

Business News : Infosys’ constant currency revenue growth guidance of 6-8% year-on-year (y-o-y) for FY19 was on expected lines. The marginal beat can be ascribed to a weaker exit in 4Q (0.6% CC) than our expectation (1.5% CC). This implies that the compounded quarterly growth rate (CQGR) will be better if the guidance is met.

To meet its guidance range of 6-8% y-o-y constant currency (CC) revenue growth in FY19, Infosys will have to clock a CQGR of 1.8-2.5% in the next year. We are assuming 7.5% y-o-y CC growth factoring the guidance and incremental revenue from the acquisition. A cross-currency tailwind of 130 basis points (bps) would imply USD revenue growth of 8.8% for FY19.

Net profit grew 2.4% quarter-on-quarter (q-o-q) to Rs 36.9 billion, below our estimate of Rs 38 billion, due to an impairment loss of Rs 1 billion taken in respect of Panaya.

Infosys also cut its FY19 EBIT margin guidance to 22-24% versus the FY18 band of 23-25%. This will largely factor in investments in localised talent, revitalising sales, digital capabilities and delivery staff. The 1% revision amounts to $120 million, and considering that these are investments in people, which will only come gradually, we see the lower end of the margin band as conservative, and expect it to be raised during the course of the year.

The additional $2 billion payout over and above the normal dividend payout (policy of 70% of FCF) will peg the cash returns at a high level (Rs 100/share pre-tax, 8.6% of current market price) for the second year running. This should act as a crucial support for the stock.

Given these developments, we have cut our earnings by around 2% for FY19/20E, factoring in the weaker exit and the marginal profitability decline. Infosys’ performance in the recent years has been in line with peers.

The guidance on revenues was on expected lines. However, we believe that the lower end of the EBIT margin band of 22% is conservative, with pricing pressures seemingly tailing off and the share of higher-margin Digital inching up. Our price target of Rs 1,330 discounts forward earnings by 16x. We maintain a ‘buy’ rating on the stock in the light of the developments.

→ Infosys Q4 Results