Will Infosys stock rise after clean chit for Salil Parekh?
Salil Parekh (File photo: Bloomberg)
Read 2 minutes. Updated: 10 January 2020, 06:38 PM IST Mobis Philippe, R. Sriram
Announcing its Q3 results, the company has revised its guidance for full-year sustained currency revenue growth to 10% -10.5%, up from 9% -10% previously.
Infosys said on Friday that its audit committee found no evidence of financial inconsistency or executive misconduct
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MUMBAI: Infosys Ltd shares have received the cold shoulder of investors ever since an unnamed whistleblower alleged serious misconduct by its top management. The company has now issued a detailed statement, presenting a nearly point-to-point rebuttal to the allegations, saying that there is a question if the shares will pick up. Indeed, they have risen about 6% in pre-market trading on the New York Stock Exchange. ऑप्शन ट्रेडिंग करके डेली पैसा कमाओ 5000 से भी जयादा : ATGNSE Nifty Option Trading Tips
But profit may be limited, an analyst at a domestic institutional brokerage said requesting alimony. "A 5% rally will take Infosys shares to around 775 where they were before whistleblower compliance."
How about the fact that Tata Consultancy Services Ltd (TCS) shares have risen by almost 8% during the same period, widening Infosys valuation to a market leader substantially? Infosys shares traded at an 11-12% discount to TCS's price-earnings valuation, before the company was able to wreak havoc. Based on Friday's price on the National Stock Exchange, this rebate has increased to about 25%.
But profit may be limited, an analyst at a domestic institutional brokerage said requesting alimony. "A 5% rally will take Infosys shares to around 775 where they were before whistleblower compliance."
How about the fact that Tata Consultancy Services Ltd (TCS) shares have risen by almost 8% during the same period, widening Infosys valuation to a market leader substantially? Infosys shares traded at an 11-12% discount to TCS's price-earnings valuation, before the company was able to wreak havoc. Based on Friday's price on the National Stock Exchange, this rebate has increased to about 25%.
"A reasonable discount for TCS in the history of Infosys means TCS, despite the latest clean chit to management," the analyst says, adding that a rally of around 5% in Infosys shares would mean a price discount of around 21. Will be limited to%.
Of course, given that Infosys is growing at a slightly faster pace than TCS, this would also help reduce the valuation discount slightly.
For example, in the September quarter, Infosys revenue grew by approximately 9.9% in constant currency terms, excluding the impact of acquisitions. This was towards strong double-digit growth across all its business verticals. At TCS, growth in constant currency fell to 8.4% in Q2, from double-digit growth in the June quarter.
In Q3, Infosys reported revenue growth of 9.5%, which translates into organic terms of around 8%. According to analysts at Kotak Institutional Equities, TCS has an estimated growth rate of 6.8%.
The company has, as expected, revised its guidance for full-year sustained currency revenue growth to 10% -10.5%, up from 8% -10%. ऑप्शन ट्रेडिंग करके डेली पैसा कमाओ 5000 से भी जयादा : ATGNSE Nifty Option Trading Tips
There is a sequential improvement in operating profit margin of 20 basis points to 21.9%, however, Street was below expectations. In addition, the big deal win of $ 1.8 billion in the previous quarter is less than the $ 2.7-2.8 billion, which was a deal win in the previous quarters. But given the high volatility and softness in the banking and financial services business, the gradual slowdown was more or less as expected.
Of course, given that Infosys is growing at a slightly faster pace than TCS, this would also help reduce the valuation discount slightly.
For example, in the September quarter, Infosys revenue grew by approximately 9.9% in constant currency terms, excluding the impact of acquisitions. This was towards strong double-digit growth across all its business verticals. At TCS, growth in constant currency fell to 8.4% in Q2, from double-digit growth in the June quarter.
In Q3, Infosys reported revenue growth of 9.5%, which translates into organic terms of around 8%. According to analysts at Kotak Institutional Equities, TCS has an estimated growth rate of 6.8%.
The company has, as expected, revised its guidance for full-year sustained currency revenue growth to 10% -10.5%, up from 8% -10%. ऑप्शन ट्रेडिंग करके डेली पैसा कमाओ 5000 से भी जयादा : ATGNSE Nifty Option Trading Tips
There is a sequential improvement in operating profit margin of 20 basis points to 21.9%, however, Street was below expectations. In addition, the big deal win of $ 1.8 billion in the previous quarter is less than the $ 2.7-2.8 billion, which was a deal win in the previous quarters. But given the high volatility and softness in the banking and financial services business, the gradual slowdown was more or less as expected.
Despite the decline in quarterly profit, Infosys forecast its revenue growth for the fiscal year ending in March 2019, which was 8.5–9% in constant currency terms, compared to 6-8% earlier. Photo: Reuters
Infosys shares buyback about 3% higher than revenue growth forecast
Read 1 minute. Updated: 14 January 2019, 07:39 PM IST PTIInfosys reported a 30% drop in its December quarter profit on Friday, while it also had a share buyback of Rs 8,260 crore at higher expense, its second in less than 13 months.
New Delhi: Infosys Ltd share prices rose nearly 3% on Monday after the company approved a share buyback of Rs 2 8,260 crore and also projected to increase its revenue. Stock 90 on the BSE rose 2.52% to the end of 700.90. Intraday, it jumped 3.70% to jump 709. On the NSE, the company's shares rose 2.60% to close at jump 701.30.
In terms of equity volume, 1.901 million Infosys shares were traded on the BSE and more than 10 million shares changed hands on the NSE during the day.
India's second largest company Infosys on Friday reported a 30% drop in its December quarter profit, while approving its share buyback of Rs 60 8,260 crore at a higher expense - the second in less than 13 months.
The company said in a statement that its net profit declined to Rs 3,610 crore from 10 5,129 crore in October-December 2018. ऑप्शन ट्रेडिंग करके डेली पैसा कमाओ 5000 से भी जयादा : ATGNSE Nifty Option Trading Tips
Despite a decline in quarterly profit, the company forecasted an increase in its revenue for the financial year ending in March 2019, which was 8.5–9% in terms of constant currency, up from 6-8% previously. Revenue from operations increased by 20.3 percent to ₹ 21,400 crore.
Infosys said it would buy back 10.32 crore shares, or 2.36%, for more than 800 per share - 17% on BSE, higher than the closing price of 683.70 per share on BSE.
Infosys performance was positively surprised with strong top-line growth for the quarter, although margin performance missed, said Sanjeev Hota, assistant vice-president (research) at Sharekhan by BNP Paribas.
“The increase in revenue guidance and better exit rate for FY19 rests on double-digit growth in FY15. The buyback quantum seems lower than expected, however, will support stock performance in the medium term, ”he said.
ऑप्शन ट्रेडिंग करके डेली पैसा कमाओ 5000 से भी जयादा : ATGNSE Nifty Option Trading Tips In terms of equity volume, 1.901 million Infosys shares were traded on the BSE and more than 10 million shares changed hands on the NSE during the day.
India's second largest company Infosys on Friday reported a 30% drop in its December quarter profit, while approving its share buyback of Rs 60 8,260 crore at a higher expense - the second in less than 13 months.
The company said in a statement that its net profit declined to Rs 3,610 crore from 10 5,129 crore in October-December 2018. ऑप्शन ट्रेडिंग करके डेली पैसा कमाओ 5000 से भी जयादा : ATGNSE Nifty Option Trading Tips
Despite a decline in quarterly profit, the company forecasted an increase in its revenue for the financial year ending in March 2019, which was 8.5–9% in terms of constant currency, up from 6-8% previously. Revenue from operations increased by 20.3 percent to ₹ 21,400 crore.
Infosys said it would buy back 10.32 crore shares, or 2.36%, for more than 800 per share - 17% on BSE, higher than the closing price of 683.70 per share on BSE.
Infosys also declared a special dividend of os 4 per share.
Infosys performance was positively surprised with strong top-line growth for the quarter, although margin performance missed, said Sanjeev Hota, assistant vice-president (research) at Sharekhan by BNP Paribas.
“The increase in revenue guidance and better exit rate for FY19 rests on double-digit growth in FY15. The buyback quantum seems lower than expected, however, will support stock performance in the medium term, ”he said.
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