Infosys slips nearly 4% post Q4 results; brokerages maintain buy

IT major Infosys share price slipped nearly 4 percent in early trade on April 21 after the company reported its Q4 numbers.

The company has reported a profit of Rs 4,321 crore for the quarter ended March 2020, a 3.1 percent degrowth compared to December quarter 2019.

However, the profitability was ahead of the average of estimates of analysts polled by CNBC-TV18 which was pegged at Rs 4,230 crore, due to lower tax cost (down 16.1 percent QoQ).

Revenue during the quarter increased 0.8 percent sequentially to Rs 23,267 crore, which was slightly below the CNBC-TV18 poll estimates of Rs 23,450 crore.

Dollar revenue degrew by 1.4 percent quarter-on-quarter to $3,197 million during January-March period of FY20, with profit falling 5.7 percent to $590 million QoQ, while revenue degrowth in constant currency was 0.8 percent QoQ.

Also Read - Infosys misses FY20 revenue guidance; 8 takeaways from company's Q4 scorecard

Jefferies | Rating: Buy | Target: Raised to Rs 705 from Rs 680 per share

The company’s Q4 performance was disappointed missing on both growth & margin.

Jefferies has cut FY21 revenue growth estimate to -2percent YoY CC, while raises FY22 growth & margin estimates slightly.

The company is a preferred pick among top-tier IT companies as it is a high-quality franchise & has reasonable valuation.

CLSA | Rating: Buy | Target: Cut to Rs 800 from Rs 970 per share

The company posted weak Q4 revenue/margin, while strong deal wins/margin levers in H2FY21.

The revenue pressure is expected in Q1 due to client discretionary spending cuts, while strong deal wins & pipeline provide optimism for H2 growth & margin recovery.

CLSA has cut revenue estimates by 15percent & margin estimates by 60-100 bps for FY21-22

EPS estimates for FY21-22 cut by 15percent, it added.