Infosys shares are likely to go up on Friday after a significant rally in its US-listed shares following its strong Q1 results. Infosys American Depository Receipts (ADRs) surged over 8% on the New York Stock Exchange (NYSE) on Thursday, driven by better-than-expected revenue figures for the first quarter of FY25.
Infosys ADRs closed 8.38% higher at $22.50 during regular trading hours on NYSE and gained an additional 0.22% in after-hours trading, ending at $22.30.
India’s second-largest IT services company reported a consolidated net profit of ₹6,368 crore for the quarter ending June 30, 2024, a 7.1% increase from ₹5,945 crore in the same period last year. However, the profit decreased by 20.1% quarter-on-quarter due to a tax refund boost in the previous quarter.
Infosys Q1FY25 revenue from operations rose by 3.7% to ₹39,315 crore from ₹37,923 crore in the previous quarter. The company’s dollar revenue for the quarter was $4,714 million, marking a 2.1% increase from $4,617 million in Q1FY24 and a 3.3% rise from $4,564 million in Q4FY24.
At the operational level, earnings before interest and taxes (EBIT) increased by 8.8% to ₹8,288 crore, with an EBIT margin improvement of 100 basis points to 21.7%.
Infosys has raised its revenue growth guidance for FY25, now expecting a constant currency revenue growth of 3% – 4%, up from the earlier estimate of 1% – 3%. The company also maintained its operating margin projection of 20% to 22% for the current financial year.
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, commented that Infosys’ results exceeded expectations and that the raised FY25 revenue growth outlook was a positive surprise. He believes the worst might be over for the IT sector, looking at the performance of TCS and Infosys.
“Technically, Infosys stock shows a positive trend. A breakout above ₹1,733 suggests potential upside targets in the ₹1,825 – ₹1,850 range, with a stop loss at ₹1,720 to manage risk,” Tapse added.
On Thursday, Infosys shares closed 1.93% higher at ₹1,759.15 on the BSE.
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