Motilal Oswal Assigns Buy On Large Cap IT Stock, Sees 20% Potential Upside, Trading Near 52-Week Low

Motilal Oswal has initiated a Buy call on Infosys Ltd. (INFO) with a target price of Rs. 1,520/share. It claims a 20% upside from the stock's current level if purchased at the current market price.

Aaccording to the brokerage, Analysis of the FY23 annual report of Infosys suggests that despite the adverse macros, enterprises continue to re-evaluate their cost structure and strengthen their business resilience. Additionally, they are adopting technological investments to foster agility.

Valuation & VIews

According to Motilal Oswal, INFO's discretionary business has been adversely impacted by the macroeconomic slowdown over the last few months. The delayed decision-making and higher deal scrutiny will have a direct impact on the deal conversion. "We expect FY24 revenue growth to be around 5.2% YoY in CC terms, which falls under the lower end of the guidance range. Despite near-term weakness, we expect INFO to be a key beneficiary of acceleration in IT spends in the medium/long term. The stock is currently trading at 18x FY25E EPS. We value the stock at 21x FY25E EPS, implying a TP of INR 1,520," the brokerage has said.

Stock Outlook

On Friday, the share price of INFO last traded at Rs. 1,265.95 apiece, down 1.31% from its previous close of Rs. 1,282.80/share. It declined 2.54% in the past 1 week.

The stock has given 16.44% in the past 1 year. It has given 76.41% positive return in the past 3 years and 100.94% in the past 5 years, respectively.

The stock traded the 52-week high on 1 December 2022 at Rs. 1,672.60 apiece and 52-week low on 17 April 2023 at Rs. 1,185.30 apiece, respectively.

About - Infosys Ltd. (INFO)

Infosys Ltd. (INFO) is a leading IT sector firm. It provides consulting, technology, outsourcing and next-generation digital services to enable clients to execute strategies for their digital transformation. It has a market capitalisation of Rs. 5,25,187 crore, it is a large-cap company.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.