Infosys shares hit seven-year high
Infosys shares hit a seven-year high, adding about ₹50,000 crore to its investors’ wealth in the first hour of trade on BSE.The IT services major recorded better-than-expected results on Wednesday backed by $1.74 billion worth of orders during the first quarter. The company also bagged what analysts say is its largest deal win. The Vanguard deal win announced early this week is learnt to be around $700 million. At the end-of-the-day closing on Thursday, Infosys shares closed at ₹910, about 9.5 per cent higher than the previous day’s closing price. The Bengaluru-headquartered company recorded an 11.5 per cent increase in net profit to ₹4,272 crore for the first quarter of FY21 on a year-on-year basis on the back of large deal wins. Infosys’ revenues rose 8.5 per cent to ₹23,665 crore. The company had lost as much as ₹22,520 crore when Vishal Sikka resigned as the CEO of Infosys in August 2017. Deals galoreThe firm secured 15 large deals (13 from the US, two from Europe) with a TCV (total contract value) of $1.7 billion, of which 19 per cent was from net new deals. These deals include five in financial services, three each in retail, ENU (energy, natural resources and utilities) and hi-tech, and one deal in manufacturing vertical. Drawing confidence from these deal wins, Infosys reverted to giving guidance, which it had suspended last quarter. Its revenue forecast is 0-2 per cent in constant currency. The operating margin for FY21 has been forecast to be 21-23 per cent. Calling it nothing less than a superlative performance, IDBI Capital, in its report, said it has factored in Q1FY21 positive guidance and increase FY21/22 revenue (in US$) by 2.6 per cent /1.9 per cent and EPS by 12.8 per cent /11.3 per cent. “We now forecast revenue/EPS CAGR of 5.4 per cent /9.7 per cent over FY20-22E. We upgrade the stock to accumulate from hold,” the note said.