Axis Securities on Infosys
· Strong deal wins in Financial services ( 32% of revenue): Growth is likely to revive from Q2 on the back of strong deal wins in the quarter (USD 446 mn) and continued momentum in tier-II and regional banks
· Margin to gradually improve: Given an array of margin levers on tap (offshore mix, onsite pyramid, stronger growth in high-margin digital business, automation, operating leverage with stronger revenue growth, and INR depreciation), we expect margin performance to gradually improve through the course of the year to the top of the guided range ( 22-24%)
· North America (60% of revenue) to witness broad-based recovery: Management highlighted, growth in Financial Services is likely to pick up on the back of healthy deal wins (USD 446 mn) with strong traction in regional and tier-2 banks. Further, Retail, Energy and Utilities are also seeing strong traction which should drive better growth in FY19.
· Infosys has signed a definitive agreement to acquire Fluido, a Salesforce advisor and consulting partner in Nordics. The acquisition will expand Infosys’ capabilities in key geographies like Finland (Espoo), Denmark (Copenhagen), Sweden (Gothenburg), Norway (Oslo) and Slovakia (Banská Bystrica) for services in Salesforce
· We maintain a BUY with a target of Rs 794.