Motilal Oswal Suggests Buying The Stock of Infosys For 20% Gains

According to Motilal Oswal, the recent news about the exit of two senior executives of Infosys, Narsimha Mannepalli and Vishal Salvi (both with responsibilities including delivery), may bring back investor concerns about leadership attrition increasing post the exit of co-presidents, Ravi Kumar and Mohit Joshi over the last three quarters.

"More critically, investors need to be watchful of further exits, especially in delivery leadership (a known gap area at Cognizant), as our channel checks earlier this month indicated high demand for delivery-related roles in the tech industry. Though we see this as an addressable risk, any supply-demand gap in project management could potentially hurt project timelines in the short term. We remain positive on Infosys as structural growth prospects remain intact," the brokerage has said.

Valuation and view on Infosys

Amid weak 4QFY23 results and continued impact in 1HFY24, the stock has corrected significantly (>30% from the peak) and is trading at an attractive valuation of 18x FY25E EPS. "We expect Infosys to be a key beneficiary of the acceleration in IT spending in the medium term. Retain BUY with a target price of Rs 1,520, valuing at 21x FY25EPS," the brokerage has said.

Stock price movement of Infosys

The stock of Infosys last closed trade at Rs 1265.65 on the Bombay Stock Exchange. The stock had this year hit a 52-week high of Rs 1672.45 and a low of Rs 1215. The stock now trades more closer to its 52-week low.

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal. This is not a recommendation from the author neither from Greynium Information Technologies. The brokerage firm, the author and Greynium Information would not be responsible for losses if investors chose to buy, sell or hold based on a decision from the article. Please consult a professional advisor.