Infosys' (INFO) had another quarter of an all-round beat to ours and consensus forecast. Q3FY21 revenue grew by 5.3% QoQ in CC and 6.2% QoQ in USD vs. our forecast +2.4% in CC. EBIT margin improved by 7bps QoQ to 25.4% vs. our forecast of 24.6%. EPS of Rs12.2, +7.2%/+16.5% QoQ/YoY was also a beat to our forecast, said IDBI Capital Markets & Securities.

Q3FY21 saw an all-time high large-deal TCV of USD 7.13 billion (net-new being ~73%). Further, the increase in FY21 guidance was also a beat. INFO has now guided for CC revenue growth of 4.5-5% vs. 2-3% earlier and EBIT margin of 24-24.5% vs. 23-24%. Further, it is confident of a double-digit revenue growth in FY22.

Commenting on the Infosys Q3 review, IDBI Capital said, "We factor the beat in Q3FY21, TCV & outlook for deal pipeline, FY21 guidance revision and increase FY21/22/23 revenue (in USD) by 2.8%/4.8%/4.6% and EPS by 4.1%/4.6%/4.8. We now forecast revenue/EPS CAGR of 12.3%/13.9% over FY21-23E. Given strong growth and RoE of 30%+ we increase our target PER to 26x (vs. 30x for TCS) from 23x earlier. We now recommend Accumulate with new target price of Rs 1,554."

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