Infosys surges 6% post Q1 results; market cap crosses Rs 3-trillion mark

Infosys hit a new high of Rs 1,384, up 6%, bouncing back 7.5% from its early morning low of Rs 1,288 on the BSE.

Shares of Infosys hit a new high of Rs 1,384 per share, surging 6% on the BSE, in an otherwise subdued market after the company reported an in-line performance for the first quarter ended June 2018 (Q1FY19) and its board approved the issuance of one free share for every share held (that is a 1:1 bonus issue).  The company announced its Q1FY19 results on Friday after the market hours.

The stock surpassed its previous high of Rs 1,358 recorded on July 3, 2018 in intra-day trade. It bounced back 7.5% from its early morning low of Rs 1,288 on the BSE.

A sharp rally in Infosys stock price has seen the market capitalisation (market-cap) of the country’s second-largest IT services company crossing the Rs 3 trillion mark first time during intra-day trade today. Infosys market-cap touched Rs 3.02 trillion after its stock hit new high today, the BSE data shows.

Tata Consultancy Services (TCS), Reliance Industries (RIL), HDFC Bank, Hindustan Unilever (HUL), Housing Development Finance Corporation (HDFC) and ITC are ahead of Infosys in overall market-cap ranking, having market-cap of more than Rs 3-trillion.

Infosys has maintained the FY19 constant currency (CC) revenue guidance at 6%-8% YoY and EBIT margin guidance at 22%-24%.

Management is sounding confident on FY19 demand and has highlighted Retail, Insurance, energy & utilities (E&U) and manufacturing verticals are driving momentum. Demand is driven by digital technologies such as cloud, data & analytics, Internet of Things (IoT), and customer experience.

“We are encouraged by the growth recovery in core markets of US and Europe, major verticals have returned to growth particularly retail and improved outlook for banking and financial services (BFS), multi quarter high large deal signings worth USD 1.1 billion of which 40% is from BFS, addition of 4 clients in USD 100 million category,” analysts at Antique Stock Broking said in result review.

Overall, a decent quarter by the company with improved demand outlook and healthy deal wins. Demand revival is gathering pace with FY19 CC growth better than FY18. After the transition/stability phase in FY19, growth should further improve in FY20, the brokerage firm said with ‘buy’ rating on the stock and 12 month target price of Rs 1,309.

We maintain our Buy rating on Infosys with a revised price target of Rs 1,450, Sharekhan said in stock update.

“Infosys reported in-line quarterly performance, with CC revenue up 2.3% q-o-q and EBIT margin at 23.7%. The management retained CC revenue growth guidance and EBIT margin guidance in FY2019, though a positive surprise is likely.  We remain optimistic on BFSI recovery, led by ramp-up deals, higher digital adoption and recovery in Europe region,” the brokerage firm said in a note.

At 10:35 am; Infosys was trading 4% higher at Rs 1,361 on the BSE, as compared to unchanged in Sensex, which quoting at 36,543 points. The trading volumes on the counter nearly doubled with a combined 10.5 million shares changed hands on the BSE and NSE so far.