Infosys shares in focus after Q4 profit declines 12% YoY. Should you buy, sell or hold?

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Infosys shares are likely to be in focus on Monday after the IT major reported a 12% year-on-year (YoY) decline in consolidated net profit for the March quarter, at Rs 7,033 crore, compared to Rs 7,969 crore in the same period last year.

Revenue for Q4FY25 rose 8% YoY to Rs 40,925 crore from Rs 37,923 crore a year ago. However, revenue growth in constant currency (CC) terms stood at 4.8% YoY, while topline declined 3.5% quarter-on-quarter (QoQ) in CC terms.


Guidance for FY26


The company has projected revenue growth of 0%–3% in constant currency and an operating margin of 20%–22%.Also Read: Bajaj Finance, IndiGo among 10 largecap stocks where FIIs raised stake in Q4

Operating Margin


Infosys’ operating margin for the quarter stood at 21%, an increase of 0.9 percentage points YoY, but a QoQ decline of 0.3 percentage points.

Management Commentary


Commenting on the Q4 earnings, CEO and MD Salil Parekh said, “Our performance for the year has been robust in terms of revenues, expansion in operating margins, and the highest-ever free cash generation. Our depth in AI, cloud and digital, and strength in cost efficiency, automation, and consolidation position us well for the needs of our clients.”Infosys CFO Jayesh Sanghrajka added that the company delivered its highest-ever free cash flows in FY25, while full-year operating margins expanded by 0.5 percentage points. This, he said, reflects the company’s “relentless focus on identifying opportunities for efficiency and executing Project Maximus with discipline, after navigating multiple headwinds in a challenging macro environment.”

Should You Buy, Sell, or Hold Infosys Stock? Here’s What Analysts Say:


Elara Capital


Elara upgraded Infosys to “Accumulate” from “Reduce” but cut its target price to Rs 1,530 from Rs 1,830, citing improved visibility of low mid-single-digit growth amid ongoing uncertainty.

The brokerage noted that Infosys missed its FY25 revenue growth guidance of 4.5%–5%, delivering just 4.2% in CC terms. Q4 revenue declined 3.5% in CC and 4.2% in USD. Elara expects near-term volatility and has cut its FY26E and FY27E earnings estimates by 6%–8%.

Antique


Antique retained a “Hold” rating and revised its target price to Rs 1,750 from Rs 1,900.

It highlighted that verticals such as manufacturing and retail are facing budget cuts and delays in decision-making due to tariff-related uncertainties. It expects growth to be back-ended, depending on macroeconomic stability and quicker deal conversions.

The brokerage has also lowered Infosys’ valuation multiple to 24x from 25x and reduced its FY26E and FY27E EPS estimates by 5% and 3%, respectively.

Motilal Oswal (MOSL)


MOSL maintained a “Neutral” rating on Infosys with a target price of Rs 1,600.

Despite a weak Q4, it called Infosys’ FY26 guidance optimistic. It expects normal seasonality to drive a positive start to the new fiscal, with lower pass-through revenues aiding margin performance. While earnings downgrades are likely, MOSL believes they may be smaller than feared, though still below consensus.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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