Infosys stock is medium term tech pick of Vaishali Parekh. Here’s why

On BSE, Infosys stock ended at ₹1,510.85 apiece marginally down from the previous closing of ₹1,515.50 a piece. Its market cap is around ₹6,35,777.89 crore.

Infosys is the second largest company after TCS in the sector, while it is the fourth largest company in terms of market share.

So far in 2022, Infosys stock has plummeted by 20.36% on BSE. However, from its 1-year low of ₹1,355.50 which was recorded on September 23rd, Infosys stock has climbed by 11.5% on BSE.

In a technical note on Wednesday, Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher said, Infosys stock after the short correction has consolidated and taken support near the 1500 levels which is almost the 50% retracement of the recent rally and indicating some improvement in the bias with the RSI also flattening out near the oversold after the correction has indicated signs of reversal with upside potential visible.

Further, Parekh said, with a decisive move past the significant 50EMA and 200DMA levels of 1550 would further strengthen the trend to anticipate further upward targets in Infosys.

Thereby, Parekh’s note added, with the chart looking good, we recommend a positional buy in Infosys stock for an upside target of 1660 keeping a stop loss of 1440.

In its regulatory filing, Infosys announced that as of December 28th, cumulatively the company has bought back 2,19,94,000 equity shares under the buyback plan. On December 28 alone, the company bought a total of 15,85,000 equity shares on BSE and NSE at a price of ₹1,512.17 apiece.

Infosys began its ₹9,300 crore share buyback plan on December 7th. The buyback will continue till June 6, 2023. The company’s total buyback offer would be over 5.02 crore equity shares aggregating at a face value of ₹5 each. The buyback price should not exceed ₹1,850 per share. Also, of the total buyback plan, Infosys has proposed to utilize at least 50% of the maximum buyback which would come to ₹4,650 crore (50% of ₹9,300 crore).

In its buyback notice, Infosys stated that it will help the company to return surplus cash to its shareholders.

During the second quarter of FY23, the company posted a consolidated net profit of ₹6,021 crore up by 11% yoy, while revenue stood at ₹36,538 crore higher by 23.43% yoy. In the quarter, Infosys reported strong Q2 performance with year-on-year growth at 18.8% and sequential growth at 4.0% in constant currency. Year-on-year growth was in double digits across all business segments in constant currency terms. Digital comprised 61.8% of overall revenues and grew at 31.2% in constant currency.

Infosys currently has raised its FY23 revenue growth guidance range from 14-16% to now 15-16%, while revising its EBIT margin guidance to 21-22%.

The stock will be in focus in January ahead of its third quarterly result announcements for FY23. The company will present its December 2022 quarter earnings on January 12th. Also, the buyback offer will continue to sway sentiments in Infosys stocks.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.