Infosys share price hits 52-week low, stock down 27% in 2022 – should you buy?

Infosys stock price touched a fresh 52-week low of Rs 1,360.05 and Rs 1,360 per share on the BSE and NSE, respectively, after falling 1% intraday in today’s session. Infosys’ share price has fallen more than 27 percent so far in 2022 amid a muted outlook.

The Infosys stock price had last touched a 52-week low of Rs 1,367.20 on June 17, 2022.

After the US Fed announced another rate hike of 75 basis points along with dovish comments, US markets closed 1.5 percent lower, led mainly by IT stocks on Wednesday. Following suit, Indian IT stocks were also weak in the early morning but recovered as the day progressed.

The Nifty IT index, one of the top losers among the sectoral indices, was down 0.50 percent at 26,710.

IT index P/E multiples are down 30% y-o-y, with ~5% earnings cut, while the P/E rating downgrade was led by risk macro on growth (FY24E), earnings cuts were driven by margin cuts as a lag. between growth and normalization of the operating structure, HDFC Securities said.

The brokerage sees margins bottoming out in the first quarter, with medium-term tailwinds of normalization in attrition/subcone, utilization and pricing. It maintains a constructive position on the sector, with Infosys as the preferred choice for Tier 1 and persistent mid-tier IT systems.

Similarly, Axis Securities believes that Infosys is well positioned to drive growth from a long-term perspective, given its multiple long-term contracts with the world’s leading brands.

While the company’s margins are likely to be under pressure in the near term, mainly due to increased outsourcing costs, richer revenue visibility gives us confidence in the growth of its business going forward, added the national brokerage.

Axis Securities recommends a buy rating on the stock and assigns a P/E multiple of 24x to its FY24 earnings of Rs 73.4/share to arrive at a price target of Rs 1,750 each, a 29 per hundred up

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