Infosys holds its July low as Kotak flags a guidance cut

Infosys Limited shares hit a 52-week low of Rs 980.30 on 29 September, just under the 1 July low of Rs 982.40, then closed above it. Q2 FY27 results are due on 23 October. Q1 FY27 (consolidated, 23 July): - Revenue: Rs 48,211 crore, up 14.0% YoY; constant currency up 2.4% YoY, 1.0% QoQ - Operating margin: 21.1%, up 30 bps YoY - PAT: Rs 7,769 crore, up 12.2%; EPS Rs 19.19, up 14.9% after the buyback - Large deal TCV: $3.6 billion, 61% net new - FY27 guidance cut to 1.5% to 3%, from 3.5% at the top; margin band 20% to 22% kept September's fall was sector-wide (US rates, visa fees, crude near $100). Kotak Institutional Equities expects a muted Q2 and another guidance cut (fair value Rs 1,200); JM Financial has Add, target Rs 1,130. Infosys [] shares trade at Rs 1,000.16 at 10:56 AM IST on 1 October on StockGro, ***** (NSE near Rs 1,014), down 12.9 percent in a month. P/E 13.45, sector near 20x. My view: accumulate in halves, the second half only after 23 October. Against TCS (my 1 October post), Infosys grew 1.0 percent QoQ in constant currency to TCS's 0.4, lifted margin 30 bps where TCS lost 50, and signed $3.6 billion of large deals, at about the same 13x annualised profit. That keeps it first in my IT ranking. The risk is the 23 October guidance. A trim at the top end is my base case; a lower end below 1.5 percent or a margin band below 20 percent would change my mind. Holders: hold. Fresh money: half between Rs 980 and 1,015 now, half after the guidance. Exit on a close below Rs 980.30, the September low. Resistance: the 1 September close of Rs 1,156. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.