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INF

Infosys Ltd

INFY · Technology · IT Services · Cap: ₹7,65,000 Cr

₹1,845.00

-0.6% today

WATCHMODERATE RISK

LYNCH Research Score

78 / 100

#4 Watch & Accumulate

Valuation Assessment

Fair

P/E: 24.2x · P/B: 7.8x

Portfolio Holding Context

18% Weight

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Fundamental Analysis

Quality: High

ROE (Return on Equity)

31.4%

High return on equity base

ROCE

38.5%

Superior capital efficiency

Revenue Growth

9.8%

Consistent top-line momentum

Operating Margin

21.2%

High operating leverage

Debt to Equity

0.06

Conservative balance sheet

FCF Yield

3.6%

Cash generation profile

Valuation & Signals

Fair

Valuation Ratios

Trailing P/E: 24.2xPrice to Book: 7.8xEV/EBITDA: 16.2x

Valuation is inline with 5-year median, reflecting balanced risk/reward relative to TCS.

LYNCH Signals

Momentum: Neutral

Trend: Consolidating

Earnings: Stable

Relative: -1.2% vs Nifty IT

LYNCH View: Solid Tier-1 IT player offering reasonable valuation and strong execution, though slightly behind TCS in margin defense.

Potential Catalysts & Risks

Potential Catalysts

✓Generative AI service contract acceleration (Topaz platform)
✓Large deal total contract value (TCV) expansion
✓Subcontractor cost reductions

Key Downside Risks

⚠Client decision cycles dragging out in retail/telecom verticals
⚠Pricing pressure on renewal contracts

Research Scenarios

Bull Case

Generative AI migration programs add $1.2B in incremental annual contract value over 18 months.

Bear Case

Attrition spike in key AI talent combined with European spending softness caps operating margins near 20%.

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