After the announcement of the second quarter (Q2FY24) results, significant movement is witnessed in the stock prices of two IT behemoths – Infosys and HCL Tech.
Infosys Performance Overview: On Friday, October 13th, the Infosys stock saw an initial dip of 4%. This decline followed a downward revision in the company’s guidance by its management. In contrast, HCL Tech’s shares are gaining momentum, showing an uptick of more than 2.5%.
Dividend Announcements: Both these IT giants have announced interim dividends. Infosys has declared a 360% dividend per share, while HCL Tech has announced a whopping 600% interim dividend.
Brokerage Take on Infosys:
- Morgan Stanley has given an ‘Overweight’ rating to Infosys, revising its target from 1640 to 1600. The brokerage house foresees a strong EBIT growth in FY25. There are expectations of an improvement in revenue growth and margins, and in the near term, P/E multiples are anticipated to decline. This comes after the company slashed its revenue guidance and the management’s cautious commentary.
- JP Morgan advises a ‘Neutral’ stance on Infosys with a target of 1400. Meanwhile, Jefferies suggests buying the IT giant’s shares, revising its target from 1550 to 1650 per share. City has maintained a ‘Neutral’ recommendation with a target of 1565.
- Other firms such as Macquarie and Nomura have given ratings of ‘Underperform’ and ‘Neutral’ respectively, with target prices of 1160 and 1400.
Infosys Q2FY24 Financial Highlights: Infosys announced a net profit of 6,212 crores, marking a 3.2% annual increase. The company declared a dividend of 18 rupees per share, with a face value of 5 rupees per equity. This results in a 360% per-share interim dividend for investors. Revenue for the quarter stood at 38,994 crores, witnessing a 6.7% yearly and 2.8% quarterly growth. Gross profit was reported at 11,963 crores, registering a 7.5% annual and 3.6% quarterly increase.
Brokerage Insights on HCL Tech:
- JP Morgan rates HCL Tech as ‘Underweight’ with a target of 1070. City suggests a ‘Neutral’ perspective with a target of 1295. Goldman Sachs retains its ‘Neutral’ stance, revising its target from 1170 to 1180.
- Macquarie remains bullish, maintaining its ‘Outperform’ recommendation with a target of 1550. Nomura, on the other hand, has reduced its target from 1220 to 1200, keeping a ‘Neutral’ rating.
HCL Tech Q2 Financial Synopsis: HCL Technologies declared a consolidated net profit of 3,833 crores for the September quarter. This represents an increase from the 3,531 crores in the June quarter and 3,487 crores from the same period the previous year. The total income was 27,037 crores, up from 26,640 crores in the June quarter and 24,992 crores a year ago. Based on a face value of 2 rupees, HCL Tech announced a 600% dividend, translating to 12 rupees per share for the investors.
The above data showcases the robust performance of both IT companies and provides a comprehensive perspective on their financial trajectory as perceived by leading brokerage houses.
