Infosys Adjusts FY24 Revenue Outlook After Q3 Beat, Stock Ticks Higher
Portfolio Pulse from Anusuya Lahiri
Infosys Ltd (NYSE: INFY) reported a slight 0.1% Y/Y revenue increase in Q3 to $4.66 billion, surpassing consensus estimates. Despite a 1.0% Y/Y and Q/Q decline in constant currency terms, the company achieved a significant deal win TCV of $3.2 billion. Operating margin fell by 100 bps to 20.5%, and EPS met expectations at $0.18, down from $0.19 the previous year. Infosys holds $2.6 billion in cash and equivalents and generated $665 million in free cash flow, up 15.5% Y/Y. CEO Salil Parekh highlighted strong large deal wins and the use of Infosys' generative AI and cloud capabilities. The company adjusted its FY24 revenue growth outlook to 1.5%-2.0% in constant currency, slightly narrowing the previous range of 1.0%-2.5%. Infosys shares rose 1.60% in premarket trading to $18.39, outperforming the SPDR S&P 500 ETF (NYSE: SPY), which gained 8% in the same period.
January 11, 2024 | 12:28 pm
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NEUTRAL IMPACT
Infosys outperformed the broader index, with its stock gaining 14% compared to SPY's 8% in the last half.
While INFY's performance is compared to SPY's in the article, the direct impact on SPY's price due to Infosys' earnings is minimal as SPY is a broad market ETF and not significantly swayed by a single company's earnings.
CONFIDENCE 80
IMPORTANCE 30
RELEVANCE 50
POSITIVE IMPACT
Infosys reported a Q3 revenue beat and adjusted its FY24 revenue outlook, leading to a premarket stock price increase of 1.60%.
The positive Q3 earnings report and the revised FY24 revenue outlook, which is within analyst expectations, are likely to instill investor confidence and could lead to a short-term increase in stock price.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100