Prabhudas Lilladher’s research report on Infosys
Infy’s revenue of $ 3613 mn, growth of 2.8% QoQ USD (Ple: 3.8%, Cons: 3.6%) was lower than our and cons estimates. Sequential volume growth in 4QFY21 was strong at 4.6%. However, revenue growth was subdued because i) large part of the volume growth was led by offshore effort, ii) lower contribution from third party deals and iii) typical weak seasonality in 4Q. Digital revenues continued to grow at strong rate of34.4% YoY CC. Manufacturing (+6.1% QoQ USD), Retail (+3.5% QoQ USD) reported strong recovery and HiTech continued to grow at strong rate of 8.4% QoQ USD. Infy reported modest deal wins of $ 2.1 Bn taking FY21 order book to $ 14.1 Bn, +57% YoY. Management has guided 12-14% YoY CC growth in line with consensus estimates.
Outlook
We have cut our estimates by 3%/1% in FY22E/23E as we factor buyback. We value Infy at 27x to arrive at a changed target price of INR 1632 (earlier: INR1646) on FY23 EPS of Rs. 60.5. Infy is currently trading at 25.9X/23.1X FY22/23 earnings of INR 53.8/60.5 on FY22/23E respectively. Reiterate BUY.
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