The American Depository Receipts of Infosys rose nearly 5% on Thursday as the IT major's third quarter numbers were broadly in line with expectations.
Infosys ADRs are currently trading at $18.99, up about 4.8% from the previous close.
The Bengaluru-based software exporter’s net profit fell 7% to Rs 6,106 crore in the quarter ended December. However, the profit figure was on par with ET Now poll estimate of Rs 6,140 crore.
Revenue for the third quarter rose by a marginal 1% to Rs 38,821 crore.
"Infosys' overall Q3 numbers are broadly in line with expectations. Also tightening of FY24E guidance is also in line with our expectations," said Sanjeev Hota, Head of Research, Sharekhan by BNP Paribas.
The company has raised its FY24 revenue guidance at the lower end to 1.5%, but trimmed the upper target to 2%. Now, it expects the revenue to grow in the range of 1.5-2%, as against an earlier estimate of 1-2.5%.
The IT services company has retained its operating margin target of 20-22% for fiscal 2024.
Infosys has bagged $3.2 billion worth large deals (TCV) in the December quarter, with 71% of the same coming from net new deals.
Cash generation remained steady during the third quarter with FCF (free cash flow) showing growth of 17% YoY to Rs 5,548 crore. The FCF conversion to net profit for Q3 is at 90.6%.
Analysts estimate a neutral opening for Infosys stock on Friday with limited downside from the current levels. On Thursday, ahead of the earnings, Infosys shares closed flat Rs 1,520 on NSE.
"We expect Rs 1500 to remain as support and expect to stay above this. Upside can be in the range of 1540-1560 in coming days," said Prashanth Tapse, Senior VP-Research, Mehta Equities.
"Technically, 1480–1460 will be a demand zone for the stock, while 1540–1560 will act as a resistance zone," said Santosh Meena, Head of Research at Swastika Investmart.
Source Name : Economic Times