Tuesday’s rally was fueled by the historic $ 3 billion deal with Germany’s largest automaker Daimler for infrastructure review and cloud migration services.
The market capitalization ranking of India is led by Reliance Industries at Rs 12.3 lakh crore, followed by TCS, HDFC Bank and HUL. Infosys has an advantage over HDFC, Kotak Mahindra Bank is ICICI Bank.
Since March, when its market cap was 2.7 million lakhs, Infosys’ market cap has nearly doubled. Under the leadership of CEO Salil Parekh, Infosys has taken its mojo back, participating in big deals, making acquisitions, and putting a tight-knit cloud narrative into its go-to-market offerings.
Over the past year, Infosys has concluded three deals worth over $ 1 billion: Verizon, Vanguard and Daimler. The Daimler deal will strengthen Infosys’ presence in the automotive sector. A $ 1 billion Pfizer contract, sources say, is hotly contested by Infosys, TCS, Cognizant and other MNC colleagues.
Jimit Arora, partner of US IT research consultancy Everest Group, said he expects 2021 to be a year of potentially stellar growth for three key reasons: mega deals, pent-up demand from 2020, general modernization and digital transformation from pilot on schedule.
Mrinal Rai, principal analyst in IT consulting ISG, said he sees slight improvements or perhaps an acceleration in annualized contract values (ACV) for the March quarter globally if some of the larger deals are awarded.
“The Infosys-Daimler contract is on similar lines of transfer and transition. ISG explained in its quarterly index that many large companies would attempt to move away from their captive centers and most of these big deals would be examples of such initiatives. Also, agreements of this size are usually signed for a longer duration (more than five years on average). However, with Covid-19 and the changes that come with it, customers are mostly looking for digital transformation initiatives that can be done at a faster pace and in a shorter time frame, ”he said.
Sandip Agarwal of Edelweiss Securities said that with the US presidential election completed, news of more such deals should be announced. “We believe the current technological wave is the largest in history and that consensus and companies will continue to update the numbers and guidelines on this. We believe digitization is a more powerful catalyst for Infosys than IMS (Infrastructure Management Services), which increased competitor m-caps by 9.8-14.5 times compared to 2009-16, “notes a Edelweiss Securities report.
Edelweiss Securities has a price target of Rs 1,850 for Infosys. At this level, Infosys’ share price will be more than three and a half times its March low at Rs 511. A recent study by Motilal Oswal Financial Services showed that Infosys was the fastest wealth creator over the past 25 years. , with the title multiplying a staggering 688 times, and the third largest. The study uses data through March 31, 2020.