In Friday’s opening deals, Infosys Ltd shares rose nearly 5% to 1,487 per share on the BSE after India’s second-largest IT services company reported a better-than-expected 11% year-on-year (YoY) increase in consolidated net profit at 6,021 crores for the second quarter ended September 2022 and announced an open market buyback of shares worth 9,300 crores for a price of up to 1,850 per equity share.

The board of directors of Infosys has also announced an interim dividend of $16.50 per share. The business stated in a statement that the interim dividend distribution will be about 6,940 crores. Meanwhile, the operating margin for the quarter grew by 140 basis points sequentially to 21.5%.

Infsoys’ Q2 performance exceeded expectations owing to margin expansion.” Deals have reached a seven-quarter high, and hiring trends are positive. In a volatile environment, Infosys’ strong contract bookings and consistent execution provide consolation. While values at 23x remain higher than the 10-year average of 19x, we believe this is justified given the better growth expectation,” noted global company Jefferies, while maintaining a Buy rating on Infosys shares with a target price of $1,710.

The Bengaluru-based firm boosted its FY23 sales growth target to 15-16%, bringing it closer to the upper end of the previously predicted 14-16% zone. However, the business has reduced its upper end of the operating margin forecast and now expects operating margins in the range of 21-22% in FY23, down from 21-23% before.

The IT firm’s management indicated that transaction wins and pipelines indicate a solid demand environment, despite greater caution from clients. Cost-cutting and currency gains, among other things, are driving margin expansion.

“Management said the market is in a strong position, and the flow of large deals is much larger than in previous quarters. We reiterate that the current tech upcycle will greatly aid Infosys’ growth,” said brokerage and research firm Edelweiss, which maintained its ‘buy’ rating on the IT stock and set a target price of 1,891, anticipating a value rollover.

The Company:

Infosys Limited is a global Indian information technology company that provides services regarding business consulting, information technology, and outsourcing. The firm was first started in Pune and its headquarters is in Bangalore. [5] According to the Forbes Global 2000 list, Infosys is the second-biggest Indian IT business after Tata Consultancy Services in terms of revenue in 2020, and the 602nd largest public company in the world.

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Aditt Rupanii