Infosys: A long term bet

Infosys: A long term bet

Share price of Infosys fell 5% in early trade Thursday as better-than-expected earnings for the December quarter triggered profit-booking.
Infosys posted a 16.6% year-on-year (YoY) rise in consolidated net profit at Rs 5,197 crore in Q3 as against Rs 4,466 crore in the year-ago quarter.
Its revenue grew 12.3% to Rs 25,927 crore in the quarter under review from Rs 23,092 crore in the corresponding period last fiscal.

The Bengaluru headquartered IT services exporter has also increased its FY21 revenue growth guidance to 4.5-5^ in constant currency terms. In October, Infosys had guided towards 2-3 percent revenue growth in FY21 on a constant currency basis.

Infosys remains preferred stock among portfolio investors given its strong financials and new deal wins.
Infosys reported a strong $5.2 billion in net new large-deal wins in 3QFY21 that positions it well for 15% dollar revenue growth in FY22.
Management expects to offset associated margin headwinds from transition costs and passthrough revenue in such deals via a combination of operating leverage and improved profitability in previously won deals.

Evidently, increased sales aggression and best-in-class execution are helping Infosys gain disproportionate share as clients explore cost-takeout deals to fund digital spending, making Infosys one of the best plays on the theme.
Execution of client relevant strategy focused on digital transformation continues to drive superior growth, well ahead of the industry.

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