Infy stock hits record high buoyed by results

The stock rallied as much as 8.2% to a record level at Rs 1,267.9

Shares of Infosys on Monday touched an all-time high buoyed by better-than expected revenue forecasts by the country's second largest software exporter. The stock rallied as much as 8.2 per cent to a record level at Rs 1,267.9, marking its biggest single-day jump in around nine months. Shares of the company finally ended at Rs 1,238.8, up Rs 66.75, or 5.7 per cent on the BSE.

Last week, the company said it expects sales to rise between 11.8 per cent and 13.8 per cent in US dollar terms for the 12 months ending March 2017, surpassing analysts' expectations. Infosys' March quarter numbers, first by an IT major, also had a positive impact on stock prices of other tech companies including Wipro and HCL Technologies.

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"Strong guidance for FY17 revenue at 11.8-13.8 per cent year-on-year implies sustained industry leading growth which should support premium valuations," said a note by Jefferies, which has a buy rating on the stock. "Client metrics and attrition continued to show steady improvement with robust deal pipeline and positive commentary on outlook."

Several brokerages increased their price target on the stock following Infosys' result announcement.

Nomura, which increased its price target to Rs 1,315 from Rs 1,270, said: "We continue to believe that Infosys should trade at a premium to TCS, given (its) better growth".

In the fourth-quarter, Infosys' net income rose 16 per cent to Rs 3,600 crore ($540 million) in the three months ended March, the company said. That compares with Rs 3,520 crore average of estimates compiled by Bloomberg. Sales in the quarter climbed 23 per cent to Rs 16,550 crore compared with analyst projections for Rs 16,480 crore.

Global spending on IT has stalled, with Gartner Inc. last week cutting its forecast for this year to $3.49 trillion, which is 0.5 per cent below 2015. But Infosys touted several major contract wins in the current quarter, including a deal with food packaging company ConAgra Foods. "The momentum of large deal wins continued this quarter and bookings were strong," Chief Operating Officer U B Pravin Rao said in a statement.

Infosys had announced its results on Friday, when the Indian markets were shut for a public holiday. Infosys' American depository receipts (ADRs) had rallied as much as 11 per cent to $20.47 on Friday.