Infosys Shares Surge to 52-Week High: Is More Upside on the HorizonRs

Synopsis : Infosys shares have surged to a 52-week high, marking a 32% increase over the past three months. The stock is showing strong technicals and is currently trading above all key moving averages. Several brokerages have issued optimistic price targets, citing strong fundamentals and strategic initiatives that could drive further growth. The company has also reported a solid financial performance, with notable increases in net profit and revenue for the June 2024 quarter.

Infosys, a leading player in the Indian IT services industry, has seen its shares reach a 52-week high, rising by 2% to Rs1,936.90 on the Bombay Stock Exchange (BSE) on Wednesday. This marks a remarkable 32% increase in the past three months, raising the company's market capitalization to Rs8.03 lakh crore. The stock's trading activity was significant, with 1.43 lakh shares changing hands, generating a turnover of Rs27.49 crore.

The stock's low beta value of 0.7 over the last year indicates relatively low volatility, making it an attractive option for risk-averse investors. Technically, Infosys is in a strong position, with its Relative Strength Index (RSI) at 68.1, suggesting the stock is trading in a balanced zone—not overly bought or sold. Moreover, the stock is currently trading above all key moving averages, including the 5-day, 10-day, 20-day, 50-day, 100-day, 150-day, and 200-day averages.

Several brokerages are bullish on Infosys. PhillipCapital has set a price target of Rs2,140, citing factors like pricing strategies, nearshoring, automation, and cost optimization as key levers that could narrow the valuation gap between Infosys and its peer, Tata Consultancy Services (TCS). Nuvama also expressed optimism, particularly regarding a recovery in the US Banking, Financial Services (BFS) sector, and has adjusted its FY25E and FY26E EPS estimates upwards by 2% each. The brokerage introduced FY27 estimates, raising its target price to Rs2,050.

Meanwhile, Nirmal Bang has maintained an ‘Accumulate’ rating on Infosys, increasing its price target to Rs1,985 based on a valuation multiple of 24.3 times the June 2026E EPS. The firm continues to maintain a 10% discount to the target PE multiple applied to TCS.

Infosys' financial performance has also been strong, with a 7.1% year-on-year increase in net profit for the June 2024 quarter, reaching Rs6,368 crore. The company reported a revenue growth of 3.6% year-on-year, bringing in Rs39,315 crore.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors are advised to conduct their own research or consult a financial advisor before making investment decisions.