Shares of India’s second-biggest IT services major Infosys Ltd tanked over 9 per cent to hit an intraday low of Rs 1,592.05 on BSE after the company posted its earnings for the quarter ended March 2022.
The stock opened 8.7 per cent lower at Rs 1,608 against the previous close of Rs 1,748.65. With a market capitalisation of more than Rs 6,80,000 crore, the shares stand lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The Bengaluru-based company reported a 12 per cent year-on-year (YoY) rise in its consolidated net profit at Rs 5,686 crore for the quarter ended 31 March, 2022. The company had reported a net profit of Rs 5,076 crore in the year-ago period.
Sequentially, Infosys reported 2.1 per cent decline in the current quarter Q4FY22 from Rs 5,809 crore in Q3FY22.
Its board has also recommended a final dividend of Rs 16/- per equity share for the financial year ended March 31, 2022. The record date for the purposes of the Annual General Meeting and payment of final dividend is June 1, 2022. The dividend will be paid on June 28, 2022.
“We have lowered our FY23 and FY24 EPS estimate by 5 per cent on slower growth and margin pressure. However, we view Infosys as a key beneficiary of an acceleration in IT spending, given its capabilities around cloud and digital transformation. We value the stock at 28 times FY24E EPS and reiterate our Buy rating,” said Motilal Oswal Financial Services.
ICICI Securities said, “Infosys revenue and margin numbers were below our estimates for Q4.”
“Infosys reported a subdued Q4FY22 performance. Revenue and margins both were below our expectations. Considering the industry-leading double-digit revenue growth, the rising share of digital business (58.5 per cent of revenue), elevated EBIT margin levels against pre-Covid levels and a consistent capital allocation policy, we have a ‘Buy’ recommendation at present with a 1-year target price of Rs 2,250, valuing the stock at 30 times FY24E earnings,” said Mitul Shah, head of research, Reliance Securities.
