External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Infosys: Infosys (INFO IN) delivered strong growth in Q1, offset by steeper impact on margins (yet relative outperformance vs peers)</li><li>INFO increased its revenue guidance for FY23E to 14-16% (vs 13-15% earlier) and EBITM guidance was maintained at 21-23%, with a tilt to the lower end</li><li>We expect INFO’s margin recovery ahead, supported by sub-contractor optimisation (~100bps lever) and utilisation increase on trainee productivity (~50bps lever)</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Infosys: Infosys (INFO IN) delivered strong growth in Q1, offset by steeper impact on margins (yet relative outperformance vs peers)INFO increased its revenue guidance for FY23E to 14-16% (vs 13-15% earlier) and EBITM guidance was maintained at 21-23%, with a tilt to the lower endWe expect INFO’s margin recovery ahead, supported by sub-contractor optimisation (~100bps lever) and utilisation increase on trainee productivity (~50bps lever)Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Infosys, Axis Bank, Tech Mahindra, Crompton Consumer

<div><div><div><div><ul><li>Top-down assessment: Despite the correlation to the macro, the demand for the sector is structural (double-digit CAGR over five years is high probability).</li><li>Enterprise trends–growth vectors: Enterprise tech spends are strong and there’s limited impact on overall growth due to any vertical-specific slowdown.</li><li>Cloud partnerships–the second order impact: Tech value migration towards cloud providers is underway and will drive the growth curve of SIs.</li></ul><ul style="list-style-type: none;"><li><div><div><div><div><ul style="list-style-type: none;"><li> </li></ul></div></div></div></div></li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Top-down assessment: Despite the correlation to the macro, the demand for the sector is structural (double-digit CAGR over five years is high probability).Enterprise trends–growth vectors: Enterprise tech spends are strong and there’s limited impact on overall growth due to any vertical-specific slowdown.Cloud partnerships–the second order impact: Tech value migration towards cloud providers is underway and will drive the growth curve of SIs. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

External broker reports(aggregated public sources), Axis Direct

Axis Direct

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<div><div><div><div><ul><li>Financial Review: The compnay’s FY22 revenue stood at Rs 1,21,641 Cr, delivering an impressivee growth of 21.1% YoY.</li><li>Operational Review: Infosys witnessed an unprecedented demand for digital services during the year primarily on account of the pandemic, which intensified the need for greater resilience and agility within enterprises.</li><li>Key Strategies Moving Forward: (i) Focus on strategic clients to provide long-term sustainable growth; (ii) Investing in deepening the company’s research and innovation strength; (iii) Further expanding footprint across the globe; (iv) Launching cloud platform and allied products like Cobalt.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p></div></div></div></div>

Financial Review: The compnay’s FY22 revenue stood at Rs 1,21,641 Cr, delivering an impressivee growth of 21.1% YoY.Operational Review: Infosys witnessed an unprecedented demand for digital services during the year primarily on account of the pandemic, which intensified the need for greater resilience and agility within enterprises.Key Strategies Moving Forward: (i) Focus on strategic clients to provide long-term sustainable growth; (ii) Investing in deepening the company’s research and innovation strength; (iii) Further expanding footprint across the globe; (iv) Launching cloud platform and allied products like Cobalt.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Infosys Ltd - Robust Performance; Capitalizing on Strong Demand to Sustain Growth

External broker reports(aggregated public sources), Nirmal Bang

Nirmal Bang

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Nirmal Bang, one of the leading stock broking companies in India, caters to retail and institutional clients by offering them a range of financial products and services, including equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS.

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Equity Bottom-Up

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<li>Some metrics worth tracking: As indicated in our 4QFY22 results note (Downgrade cycle upon us), the net new TCV number (down 60% YoY in FY22 due to mega-deals in the base year) and the unbilled revenue growth were some of the things that stood out.</li>
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<li>Things to watch out for in the coming days: (1) Whether the worsening profit picture of the US corporate sector – earlier than expected in the March quarter 2022 in certain consumer-facing sectors - spreads further (2) Whether those to whom offer letters are/were given are on-boarded as indicated (3) Whether hiring materially weakens from here on by the Indian service providers, especially if utilization is high (4) Will there be an upward revision in the guidance if we see a strong QoQ growth in 1HFY23 (5) Order inflow and commentary by Accenture as it releases its results in the latter half of June 2022; especially surrounding the discretionary spending on consulting.</li>
<li>We expect no deterioration as of this point. (6) Commentary on demand from the cloud hyper scalers and the Saas eco-system in the US (7) A stricter implementation of work from office rules – meaning companies are open to living with higher attrition as they see weakness in demand into the future.</li>
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<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>






Some metrics worth tracking: As indicated in our 4QFY22 results note (Downgrade cycle upon us), the net new TCV number (down 60% YoY in FY22 due to mega-deals in the base year) and the unbilled revenue growth were some of the things that stood out.






Things to watch out for in the coming days: (1) Whether the worsening profit picture of the US corporate sector – earlier than expected in the March quarter 2022 in certain consumer-facing sectors - spreads further (2) Whether those to whom offer letters are/were given are on-boarded as indicated (3) Whether hiring materially weakens from here on by the Indian service providers, especially if utilization is high (4) Will there be an upward revision in the guidance if we see a strong QoQ growth in 1HFY23 (5) Order inflow and commentary by Accenture as it releases its results in the latter half of June 2022; especially surrounding the discretionary spending on consulting.
We expect no deterioration as of this point. (6) Commentary on demand from the cloud hyper scalers and the Saas eco-system in the US (7) A stricter implementation of work from office rules – meaning companies are open to living with higher attrition as they see weakness in demand into the future.









Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Infosys - Thrust Should Have Been on Core Services and ‘essential’ Digital

<div><div><div><div><ul><li>4QFY22 key takeaways: While the revenues were broadly in line with expectations, supply-side challenges meant that margins disappointed.</li></ul><div><div><div><div><ul><li>A massive margin regime change on the cards in FY24, but this will not mean much from a stock performance perspective in the next 12 months:</li></ul><div><div><div><div><ul><li>Tier-2 could face significant risks in the new environment: We fear Indian Tier-2 IT would suffer more because of vendor consolidation under the pressured profit picture for customers, a less diversified revenue mix (client, service line, vertical), which could throw up negative growth surprises, and a larger exposure to non-Global 1000 clientele whose profits are more vulnerable in the current challenging macro environment. Indian Tier-2 IT is now at a PE premium of ~20% to Tier-1 from a discount of 14% on 1st January, 2020.</li></ul></div></div></div></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

4QFY22 key takeaways: While the revenues were broadly in line with expectations, supply-side challenges meant that margins disappointed.A massive margin regime change on the cards in FY24, but this will not mean much from a stock performance perspective in the next 12 months:Tier-2 could face significant risks in the new environment: We fear Indian Tier-2 IT would suffer more because of vendor consolidation under the pressured profit picture for customers, a less diversified revenue mix (client, service line, vertical), which could throw up negative growth surprises, and a larger exposure to non-Global 1000 clientele whose profits are more vulnerable in the current challenging macro environment. Indian Tier-2 IT is now at a PE premium of ~20% to Tier-1 from a discount of 14% on 1st January, 2020.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sector Update - Cut Target Prices yet Again; Customer Stress Shows up Earlier than Expected

India

Infosys Limited provides IT consulting and software services, including e-business, program management and supply chain solutions. The Group's services include application development, product co-development, and system implementation and system engineering. Infosys targets businesses specializing in the insurance, banking, telecommunication and manufacturing sectors.

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Infosys Ltd Sp Adr (INFY US)

HSIE Results Daily: Infosys, Axis Bank, Tech Mahindra, Crompton Consumer

Infosys: Infosys (INFO IN) delivered strong growth in Q1, offset by steeper impact on margins (yet relative outperformance vs peers)

HDFC Securities

IT Sector - Decoding Signal from Noise

In this note, we decode the signal from noise and probe some key questions: (1) How structural is the demand and how correlated is it to the macros...

HDFC Securities

Infosys Ltd - Robust Performance; Capitalizing on Strong Demand to Sustain Growth

The company’s deal-wins for FY22 remained strong with 94 large deals totalling $9.5 Bn, manifesting Infy’s deep client engagement throughout the year.

Axis Direct

Infosys - Thrust Should Have Been on Core Services and ‘essential’ Digital

Infosys’ (INFY) analyst meet on 31st May, 2022 was a review of the past 4 & a half years of the ‘Salil Parekh 1.0’ era and a spotlight on the...

Nirmal Bang

Sector Update - Cut Target Prices yet Again; Customer Stress Shows up Earlier than Expected

Just 40 days post our downgrade of the IT sector to ‘underweight’, we have reduced target prices yet again and have moved our entire coverage...

Nirmal Bang

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