Infosys shares rallied nearly 7% to a hit fresh all-time high in trade today, registering the maximum gain in a year's period, after the company reported strong June quarter earnings and raised its revenue growth guidance for fiscal year 2020.
Infosys share price opened with a gain of 4.80% to Rs 762.00 against the last closing price of Rs 727.10. Later, Infosys shares rose 6.8% to the day's high as well as a new 52 week and an all time high of Rs 777.
Besides that, Infosys shares have risen 8.37% in the last 4 days, 10% in one month's period and over 18% year-to-date.
Infosys share price which was already trading above its 150 and 200-day SMA has moved above its 30 day and 50 day simple moving average today.
On Friday, the tech giant posted better-than-expected 5.3% rise in its June quarter net profit as it bagged more orders and increased FY20 revenue growth guidance to 8.5%-10% against 7.5-9.5% forecast earlier in constant currency and FY20 operating margin guidance retained at 21%-23%.
Infosys' net profit for Q1FY20 stood at Rs 3,798 crore and reported Rs 21,803 crore as its revenues for the quarter. Post the results, most brokerages have revised their price targets for the stock.
"We believe increased FY20F revenue growth guidance, strong deal win momentum and improved capital allocation policy are positive," said Nomura Research while targeting a price of Rs 680, based on 16.5x FY21F EPS of Rs 41.4. Other international brokerage houses like Jefferies, Edelweiss Securities maintained 'Buy' recommendation on the stock as well.
Commenting on the Infosys share price outlook, 'India Morning Brief report' by JM Financial Institutional Securities Limited stated, "The growth recovery at Infosys (INFO) appears well on track with a 12.4% YoY constant currency (CC) revenue growth in 1QFY20 - fourth straight quarter of acceleration in YoY growth - and inspired a revision in the FY20 CC revenue growth guidance to 8.5-10% (7.5-9.5% earlier)," and maintained 'Buy' on the stock at Rs 790 price target.
As per Motilal Oswal report namely, 'Making a case of valuation convergence', "Our earnings estimate for FY20 is up marginally by 1.6% due to the smallbeat across the board. More significant for valuations was the capital allocation policy change, which will enhance its pre-tax payout yields."
The report added "We note the contrast in INFO's 1QFY20 performance to that of TCS - wherenear-term revenue visibility remained suspect and the growth performance was lopsided in favor of two verticals. Given this - and with payouts converged too - the case for narrowing of the valuation gap gets stronger." Motilal Oswal has maintained a 'buy' rating with a price target of Rs 840, with discounts forward earnings by 19x, implying an upside of 15%.
Reliance Securities Report retained the 'Hold' rating on Infosys with a slightly revised target price of Rs 790, while the Prabhudas Lilladher Report maintained 'Accumulate' rating & arrived at an unchanged target price of Rs 782. Elara Capital has also reiterated 'Accumulate' at Rs 790 price target on the stock.
Overall, 9 lakh shares and 240 lakh shares currently changing hands on BSE and NSE, both above 3, 5, 10 day average volume traded. The stock currently trades at Rs 772 on BSE and at Rs 773.40 on NSE, respectively.
Edited by Rupa Burman Roy