Infosys hits new all-time high, stock up for third straight trading session

In the past six trading days, Infosys has gained 7 per cent after Accenture reported strong results for the quarter ended November (Q1FY22) and also gave a strong FY22 outlook

Shares of Infosys hit a record high of Rs 1,860, up 2 per cent on the BSE in Thursday’s intra-day trade. The stock surpassed its previous high of 1,848.25 on October 20, 2021. The stock of information technology (IT) consulting & software major was trading higher for the third straight day, gaining 3.4 per cent during the same period.

Infosys has outperformed the market by a wide margin. In the past one month, the stock was up 7 per cent, as compared to a 2.2 per cent fall in the S&P BSE Sensex. Moreover, in the past three months, the stock has gained 6.5 per cent as against a 4.2 per cent decline in the benchmark index. Further, over the past six months, the market price of Infosys has rallied 23 per cent, as compared to a 10 per cent risen in the Sensex and in one year it surged 48 per cent, against 23.5 per cent gain in the benchmark index.

In the past six trading days, the stock price of Infosys was up 7 per cent after Accenture reported strong results for the quarter ended November (Q1FY22) and also gave a strong FY22 outlook. Accenture follows July to August as financial year. Accenture upgraded its annual guidance by a massive 700bp as it continues to gain from demand for Cloud transformation. Its commentary on broad based demand (by region/verticals/deal size) and record high bookings (USD16.8b) should be seen as an indication of the stickiness in the demand environment for IT Services.

Infosys had also raised its FY22 revenue growth guidance to 16.5-17.5 per cent in constant currency (CC) (earlier 14-16 per cent), implying a 1.5-2.5 per cent CQGR over Q3-Q4, on the back of broad-based demand, solid deal intake and healthy deal pipeline. The company retained its EBITM guidance at 22-24 per cent.

Analysts at Emkay Global Financial Services have ‘Buy’ rating on Infosys with target price of Rs 1,910. Infosys continued to gain market share and emerged as the preferred cloud and digital transformation partner for its clients as they accelerated their digital journeys, the brokerage firm said in Q2 result update.

“We expect Infosys to be able to sustain margin at the top end of its guidance band, led by strong topline growth and resultant operating leverage, further flattening of the pyramid, and continued operating efficiency measures. While there are near term headwinds from the supply-side, we expect them to normalize over the next couple of quarters. We expect Infosys to be a key beneficiary of acceleration in IT spends,” analysts at Motilal Oswal Financial Services had said in Q2 result update. The brokerage firm has ‘buy’ rating on the stock with target price of Rs 1,960 per share.