Infosys share price today: Expert says buy in Rs 1320-Rs 1340 range even as results below expectations

Infosys share price today: Ashis Biswas, Head of Technical Research, CapitalVia Global Research said that he expects Infosys share price to witness volatility in the next few days, and traders are advised to take new entry around Rs 1320 – Rs 1340 (CMP 1397 as on 13-Apr-2021). The overall target as per our forecast is around Rs 1480 – Rs 1490 in the midterm, and advise a stop below Rs 1267.

Infosys share price today is Rs 1338, down Rs 60 or 4.25%. Infosys share price has moved down nearly Rs 100 from last week. Ashis said that Infosys has an advantage and expands its lead over the competition in handling clients' cloud journeys and assisting in big deal wins. Infosys enjoys a differentiator in cloud migration roadmaps and managing data, processes, and applications in the cloud. As per the guidance the company acquired a large deal total contract value for FY21 peaked to an all-time high of $14.1 billion with 66 percent being net new. Ashis expects the digital business will expand and generate higher margins than the company's average of 24%.

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Technical Analyst Nilesh Jain, who is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking says that Infosys witnessed profit-booking for the second consecutive session ahead of the results. The result was a mixed bag and Nilesh continues to remain positive for upside levels of Rs 1450 / Rs 1550. Any meaningful correction should be utilised as a buying opportunity. The stock has major support at Rs 1300 levels.

Sharekhan says Infosys reported lower-than-expected revenue growth, while operating profit margin (OPM) remained slightly better than their expectations. Sharekhan says that the Management stated that higher spending on digital initiatives in financial services, strong recovery in manufacturing and retail verticals, and lower exposure to impacted verticals would help it drive growth in the coming quarters.

Sharekhan said that they believe Infosys is well placed to capture opportunities from increasing spends on multi-year core modernisation and higher adoption of digital transformation initiatives across verticals. Infosys Management highlighted that margin guidance for FY2022 has factored in the next round of wage revision, effective from Q2FY2022 and return of travel and discretionary expenses from H2FY2022.

In this report, Sharekhan highlights that Infosys’ board has approved the buyback programme of Rs. 9,200 crore (maximum buyback size, excluding tax component) through the open market route at a price not exceeding Rs. 1,750 per share. Though the quantum of the buyback is similar to last buyback programmes, this share buyback size is lower than our expectations. The buyback should result in slight accretion to EPS from reduction in share count and positive from RoE perspective.