Infosys is on a hot streak!

Infosys Ltd provides consulting, technology, outsourcing and next-generation digital services to enable clients to execute strategies for their digital transformation. Infosys is the 2nd largest Information Technology company in India behind TCS.

Infosys Pune HQ

Quarterly Earnings Results Walkthrough

Infosys reported its 2nd quarterly earnings on 13th October 2022 after the market hours for the quarter ended September 2022. Infosys stock price was up by 5% on Friday after the results with a high of 1494.

Net Sales were reported at Rs 36,538 crore in September 2022 which is up by 23% from Rs. 29,602 crore in September 2021.

Quarterly Net Profit stands at Rs. 6,026 crore in September 2022 which is up 11% from Rs. 5,428 crore in September 2021.

Infosys EPS has risen to Rs. 14.35 in September 2022 from Rs. 12.88 in September 2021.

EBITDA is at Rs. 9,486.00 crore in September 2022 up 13.54% from Rs. 8,355.00 crore in September 2021.

Infy has announced a large deal TCV of USD2.7b (up 60% QoQ, net new at 54%), which was its highest in the last seven quarters and was supported by a strong pickup in cost optimization-related work.

The management tells of growth in the large deal pipeline, in spite of an adverse demand environment. The management has also said it is seeing weakness in parts of Retail, Hi-Tech, Financials (Mortgages), and Telecom as it has started seeing some deal-related slowdowns in these segments.

Technical Analysis

Infosys Weekly Candlestick Chart on Sharekhan’s TradeTiger

Infosys has taken support at the 38.2% retracement level at Rs 1404 on multiple instances. This seems to be a very strong defensive level for Infosys. The price lies below the 100-day moving average indicating the stock is oversold as historically Infy price has stayed below the average for short periods.
MFI is at 41 which has risen from the oversold zone after the gap up due to results announcement.
Infosys had made a very big gap in the month of April which is marked on the image with a yellow box. We can expect this gap to be filled soon.
Infy might be set into a bull run after the strong earnings results and can make a triple top near its distribution zone around its lifetime high of Rs 1953.

Motilal Oswal is bullish on Infosys recommended buy rating on the stock with a target price of Rs 1630 in its research report dated October 14, 2022.

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