.png){kind=logo}
Infosys Limited is one of the world’s largest IT service providing companies with cross-border reach. Infosys Limited, previously called as Infosys Technologies Limited is highly active in the sectors of business consulting, technology, engineering and outsourcing services.
Infosys provides the necessary business solutions including business strategy, systems architecture, programmable design, and triaged technological services.
As providers of Finacle, Infosys solves the banking needs of international bodies while at the same time, has put emphasis on areas such as financialiservices, energy, life science and logistics.
As of the latest closing prices, reached on the 22nd of October 2024, Infosys Limited (INFY.NS) is priced at Rs 1,851.60 having suffered a short shrink of about 0.06% (- Rs 1.15 per share). The market cap of the company is reported at Rs 7.669 trillion which further places the entity in one of the essential bodies in the IT domain. Over the last five years, it has been established that over a beta of 0.57, such a number indicates lesser amount of volatility associated to the broader market
The stock has a trailing price-to-earnings (PE) ratio of 28.64 and earnings per share (EPS) of Rs 64.66. The upcoming earnings report is expected to come within the period of 9th to 13th January 2025.
Also, the company offers a forward dividend of Rs 41.00, yielding 2.21% and with the ex-dividend date set for October 29th 2024. The stock’s 1-year target estimate is at Rs 1,809.54.
The company continues to deliver revenue growth with some operational stability during Q2 2025. In terms of currencies, the company’s revenues were up 3.1% Q-o-Q and 3.3% Y-o-Y, constant currency. The operating margin has now remained largely unchanged this year at 21.1%, which indicates the company is able to stay profitable in terms of costs no matter how many disruptive market conditions arise.
Free Cash Flow: This for the quarter was $839 Million.
Employee Attrition: Remained stable at a figure of 12.9%.
Headcount Addition: Over a contract duration of the quarter 2500 new employees were hired.
Large Deals: 21 large deals were closed with a combined contract value of $2.4B.
Profit Margin: 17.16%
Return on Assets (ttm): 14.94%
Return on Equity (ttm): 31.40%
Revenue (ttm): $18.84 Billion
Net Income Available to Common (ttm): $3.23 Billion
Diluted EPS (ttm): $0.77
Total Cash (mrq): $3.49 Billion
Total Debt/Equity (mrq): 9.70%
Levered Free Cash Flow (ttm): $2.24 Billion
The company expects revenue growth of 3.75% to 4.5% for FY25, which has been revised and now considers market realities.
Sector Slowness: The automotive sector in Europe is on a downturn which to some extent is hampering growth.
Retail Sector Risks: Economic and political risks have a bearing on client expenditure.
Communication Sector Concerns: Cost cuts are a constraint on the non-essential spend in this sector.
Despite some sector-specific challenges, Infosys is progressing in generative AI and constructing tools for increasing clients’ efficiency. At the same time, the company expects typical seasonal trends in the middle of the fiscal year, which could affect growth momentum.
According to the reports, Infosys has collaborated with Zooplus – a European e-commerce giant in a bid to expand their e-commerce offerings and help their digital partnerships. This collaboration would allow building a Global Capability Center (GCC) in Hyderabad, India, in order to enhance the service scalability and operational efficiency of Zooplus.
This cooperation aims to promote Zooplus's initiatives through an IT platform, which Infosys Topaz, powered by generative AI creates, within the specifics of its e-commerce activities. The initiative is also expected to improve zooplus’s marketing, supply chain and product management capabilities to be able to enhance customers’ experience.
For these reasons, the Company was selected for its cutting-edge approach toward AI strategy and productivity with cost savings. Joining this partnership would enhance zooplus’s technology and value chain capabilities considerably.
In a separate news, Infosys has also increased the reach of its regional strategy in partnership with Microsoft for the purpose of promoting generative AI and Microsoft Azure across its global client base. The cooperative effort aims to offer transformational results and fully realize the technology expenditures made by the clients.
At the start of the partnership, the first technology deployed was GitHub Copilot, which greatly increased efficiency as it pertained to the modernization of code. Recognized as a leading GitHub Copilot company, Infosys employs 18,000 developers who have used the tool to write a cumulative of over more than seven million lines of code. The newly created GitHub Center of Excellence will also improve the capability of the company to develop more enterprise AI innovations.
Under the expanded agreement, Infosys will integrate Microsoft’s generative AI offerings across its portfolio, enhancing cost-efficiency, scalability, and agility for enterprise customers. This collaboration spans several sectors, including financial services, healthcare, supply chain, telecommunications and customer service.
In financial services, Infosys will utilize Finacle in conjunction with Microsoft's expertise to facilitate innovation and transformation for financial institutions. In healthcare, Infosys Helix will employ AI/ML automation on Microsoft Azure to optimize patient outcomes and streamline operations. The supply chain will benefit from a combination of TradeEdge and Azure OpenAI services, while telecommunications will see improvements in connectivity and customer experiences via Microsoft’s generative AI and Infosys Live Operations platforms.
With these strategic collaborations, Infosys aims to enhance its service capabilities, drive innovation, and deliver significant value to clients across diverse industries.
This image presents a performance overview of Infosys (INFY) stock, comparing its trailing total returns to the S&P BSE Sensex benchmark across various time periods as of October 22, 2024. The returns include dividends and distributions.
- INFY: +21.71%
- S&P BSE Sensex: +11.05%
Insight: Infosys has outperformed the Sensex with a significant margin, indicating strong short-term momentum in 2024.
- INFY: +33.28%
- S&P BSE Sensex: +22.67%
Insight: Over the past year, Infosys has delivered superior performance compared to the benchmark, showing resilience and potentially strong fundamentals.
- INFY: +13.30%
- S&P BSE Sensex: +31.67%
Insight: Over the longer term (3 years), Infosys underperformed compared to the index, signaling potential challenges during this period that may have impacted growth.
- INFY: +170.20%
- S&P BSE Sensex: +104.13%
Insight: Infosys has strongly outperformed the market over a 5-year horizon, indicating robust long-term growth and investor confidence in the company.
Infosys has exhibited mixed performance when compared to the S&P BSE Sensex. While it shows strong short-term and long-term outperformance, there was a period of underperformance in the 3-year returns. This performance could reflect company-specific strategies, industry dynamics, or broader market conditions impacting its growth trajectory.
On a comparison of Infosys (INFY) with four other major players in the Information Technology sector. The stocks compared include Wipro Limited (WIT), Cognizant Technology Solutions (CTSH), HCL Technologies (HCLTECH.NS) and Tata Consultancy Services (TCS.NS).
Infosys is a leader in the IT space with the largest market cap among the peers listed here. Wipro shows a lower market cap and stock price compared to Infosys. The decline is slightly smaller at -1.20%, indicating it may have had a similar market reaction on the trading day.
Cognizant has the highest stock price among the peers but shows a greater decline at -1.45%, with a mid-tier market cap within the group. HCL has a slightly smaller drop at -1.13% and a solid market cap, indicating its competitive position within the sector.
The overall direction for Infosys is bullish. However, it has turned bearish in the short term after recently hitting a high and resistance at Rs 1,991.95 on October 15th. Now it appears to be targeting the Rs 1,730 support zone, which is close to the previous higher low before it can rebound to turn around.
If the price is rejected at this support level, Infosys is likely to continue its bullish momentum. On the other hand, if it breaks below this level, the stock could experience a further drop.
Infosys Limited continues to demonstrate strong market leadership within the global IT sector, delivering strong financial performance and strategic growth through collaborations with companies like zooplus and Microsoft.
Despite the current short-term market fluctuations and sector-specific challenges, the company's long-term growth remains promising. With a stable operating margin, solid deal pipeline and a focus on generative AI innovations, it can be said that Infosys is quite uniquely positioned to harness the new opportunities and trends in the market.
