Shares of IT bellwether Infosys rallied as much as 5.48 per cent in the opening deals on Monday after it reported healthy set of numbers for the June quarter (April-June) of the financial year 2019-20 (FY20).
At 09:37 am, the stock was trading 4.29 per cent higher at Rs 758 apiece on the BSE. Other IT stocks, too, gained in the trade lifting the Nifty IT index 1.52 per cent higher at 15,459 levels. Out of 10 constituents, 7 stocks were trading in the green, 2 in the red while 1 scrip remained unchanged.
Tech Mahindra, TCS and Wipro were trading over half a per cent higher.
Infosys on Friday reported a 5.26 per cent year-on-year (YoY) rise in net profit at Rs 3,802 crore while it dropped 6.8 per cent sequentially.
The revenues of the Bengaluru-headquartered firm rose 14 per cent to Rs 21,803 crore YoY, increasing 1.2 per cent sequentially.
In dollar terms, revenues were at $3.13 billion, a sequential growth rate of 2.3 per cent and 10.6 per cent YoY.
An uptick in demand for its digital services, apart from a momentum in the large deal space, prompted the IT services major to increase its revenue guidance for the financial year to 8.5-10 per cent from 7.5-9.5 per cent as guided earlier. READ MORE
The company also reported total contract value (TCV) of deal wins worth $2.7 billion for 1QFY20, its highest ever.
Brokerage Motilal Oswal Financial Services (MOFSL) expects the company to post a compound annual growth rate (CAGR) for FY19-21 of 10.5 per cent in revenue in constant currency (CC) terms and 12.4 per cent in earnings per share (EPS). "The stock price discounts FY20/21 earnings by 19.4/16.6—28 per cent discount to TCS. Our price target of Rs 840 discounts forward earnings by 19x, implying an upside of 15 per cent. Maintain buy," it said in a results review note.