DBS analyst Sachin Mittal maintained a Buy rating on Infosys (INFY – Research Report) on April 19 and set a price target of $19.50.
Sachin Mittal’s rating is based on Infosys’s robust growth trajectory, particularly in its digital segment, which has seen a compound annual growth rate of 38% from FY18-FY23. This growth is largely fueled by the increasing demand for cloud services, a sector in which Infosys’s digital segment’s revenue has jumped from 25.5% to 62% in the same period. Their cloud service suite, Cobalt, plays a significant role in this expansion, offering a comprehensive range of solutions from cloud computing to cybersecurity, which positions Infosys favorably in the rapidly advancing digital transformation space.
Moreover, Mittal recognizes the potential for Infosys to gain a larger share of the global IT services market as trends toward outsourcing and offshoring gain momentum, a pattern that’s been historically evident during economic downturns. Infosys’s market share has already grown from 0.8% in 2012 to 1.5% in 2022, with expectations of continued growth backed by their record high large deal total contract value and effective cost management strategies. Despite short-term impacts on IT budgets due to fears of a recession, Infosys’s resilient long-term growth is supported by its strong execution capabilities and substantial relationships with Fortune 500 companies.
In another report released on April 19, Goldman Sachs also maintained a Buy rating on the stock with a $19.90 price target.
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Infosys (INFY) Company Description:
Founded in 1981, Infosys Ltd. is a global leader in next-generation digital services and consulting, with it providing end-to-end business solutions in North America, Europe, and India. It provides application development and management, independent validation, product engineering and management, infrastructure management, enterprise application management, and support and integration services.
