Shares of Infosys were trading as top gainers on BSE and NSE in an otherwise weak market on Tuesday after ratings agency Goldman Sachs added the stock to its conviction list while maintaining a buy call on the IT stock.
Goldman Sachs maintained Buy rating on Infosys and raised its price target to Rs 895 from Rs 756, adding the street is under-appreciating the technological strengths of the company. The target price is nearly 18% higher to previuos closing of Rs 763.75. The brokerage noted the IT major was likely to benefit from the acceleration of information system digitalisation and that it has a large Indian delivery base to be a key competitive advantage.
"Infosys' "strong" deal wins, multiple new geographies and limited exposure to service lines facing higher supply-side constraints will position the company to outperform its Indian peers on sales growth," GS added in its research note.
Following the rating update, Infosys share price touched an intraday high of Rs 791.25, rising 3.6% against the earlier closing of Rs 763.75 on BSE. The IT stock opened at Rs 774.00 and touched an intraday low at Rs 766.30.
Infosys stock has risen 6.2% in one week, 11.5% in one month and 6.8% since the beginning of the year. Infosys stock price is trading higher than its 5, 20, 50, 100 and 200-day moving averages.
Market capitalisation of the firm stood at Rs 3.32 lakh crore as of today's session.
Goldman Sachs in its report said it expects a rise in the US dollar revenue growth estimates for the IT firm and raised its estimates to 2.2% from 3.4% in FY21, 11.9% from 10.8% in FY22 and 9.9% from 9.8% in FY23.
The brokerage also added that it expects Q1 to be tough for Indian IT firms this year, both around sequential revenues and order books.
In a related update, India's second-largest software developing firm has brought back over 200 of its employees and their families -- some of them whose visas expired -- in a chartered flight from the United States in the wake of the coronavirus crisis.