Infosys shares up 12% in six months; what's next for this index heavyweight IT stock?

Shares of Infosys Ltd have climbed 11.63 per cent in the past six months. Despite the mentioned rise, the IT major's stock has slipped 7.42 per cent on a year-to-date (YTD) basis and 11.92 per cent in a year. It settled with 2.69 per cent gains at Rs 1,411.15 today. At this price, turnover on the counter stood at Rs 42.92 crore with a market capitalisation (m-cap) of Rs 5,85,683.20 crore.

On technical setup, support on the counter could be seen around Rs 1,370, followed by Rs 1,350 level. On the higher side, the index heavyweight IT stock may find stiff resistance near Rs 1,450. Buy-on-dips strategy is recommended for now, an analyst said.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Infy has been consolidating near the cluster of its EMAs (Exponential Moving Averages) on the daily timeframe for quite some time. However, the recent development of a resurgence from 200-SMA (Simple Moving Average) with runaway gaps construes some robust technical setups. On the levels front, Rs 1,370 is likely to cushion any blip, followed by the sacrosanct support of the swing low around the Rs 1350-odd zone. On the higher end, a sustainable breakthrough above Rs 1,400 is likely to provide the much-needed impetus for soaring towards Rs 1,440-1,470 levels in the comparable period."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "As we advance, Rs 1,450 is stiff resistance for the short term and support is expected near Rs 1,350. Buy-on-dips strategy is recommended and a potential upside is expected till Rs 1,450. The stop loss would be at Rs 1,349 on a daily closing basis."

AR Ramachandran from Tips2trades said, "Infosys is bullish on daily charts with next resistance at Rs 1,400 level. A decisive breach above this resistance could lead to target of Rs 1,462 in the near term. Support will be at Rs 1,373."

The counter was trading higher than the 5-day, 10-, 20-, 100-, 150- and 200-day SMAs but lower than 30-day and 50-day SMAs. The scrip's 14-day relative strength index (RSI) came at 51.99. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 23.46 against a price-to-book (P/B) value of 7.80.

The scrip has an analyst target price of Rs 1,525, Trendlyne data showed, suggesting a potential upside of 8 per cent in a year. It has a one-year beta of 0.12, indicating low volatility on the counter.

The IT firm recorded a consolidated net profit rose of Rs 6,212 crore in the quarter ended September 30, up 3.17 per cent from Rs 6,021 crore in the year-ago period. However, Infosys reduced its annual revenue forecast, raising concerns about near-term demand. The software-services exporter said it now sees full-year revenue growth at 1-2.5 per cent excluding foreign exchange volatility, against a prior view of 1-3.5 per cent.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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