Infosys: Brokerages slash Infosys price targets by up to 15%, downgrade ratings

Mumbai: Most analysts at top brokerages either downgraded ratings on Infosys or cut price targets on the stock by an average 15%, citing weak prospects after the lower-than-expected March quarter numbers.
Credit Suisse, while downgrading ratings on Infosys to neutral from outperform, cut the target price by 30% to ₹1,240. The brokerage said the company’s large exposure to the US compared to peers could put further pressure on its earnings.

“Post 4Q results-driven share price correction, we would expect the stock to remain sideways as long as US demand uncertainty persists,” said Credit Suisse. “We expect Infosys’ multiples to come off as its premium valuation was on account of superior growth against its own recent past and against its top peers, both of which are now under question.”

JPMorgan downgraded the rating from neutral to underweight and cut the target price from ₹1,500 to ₹1,200, citing uninspiring commentary after Q4 results.

CLSA has cut the target price from ₹1,800 to ₹1,550, citing a weak margin outlook and uninspiring management commentary as an additional dampener.

Nomura has cut the target price on Infosys by 22% to ₹1,290 citing a near two-year low order win in the March quarter.

“Net new deal wins at ~USD440mn in 4Q were the lowest reported number since the pandemic ie: 1QFY21,” said Nomura. “A widened FY24 revenue growth guidance band (300bp vs 200bp usually guided) represents higher uncertainty in the demand environment.”