Infosys (INFY) & Financial Times Pact on Digital Innovation

Infosys INFY recently announced a collaboration with one of the world’s leading business news organizations, Financial Times (FT). As part of the agreement, Infosys will be the Digital Innovation Partner for FT and leverage its digital innovation to support the latest creative and engaging data-led storytelling experiences to the latter’s readers.

The latest digital innovation alliance will deliver creative and immersive journalism through digital channels. Through digital techniques, FT intends to engage with the readers and bring stories that matter most to them, and deliver editorial features in more enterprising and eye-catching ways.

As part of the digital alliance, the firms will work together to digitize FT’s crossword puzzles by developing a crossword app. Crossword is one of the most loved and traditional features of the business news organization as FT’s crosswords have a loyal global following over decades. Thus, the digital format of crosswords will help the business news publication house target a wider global audience.

Infosys Limited Price

Infosys Limited Price

Infosys Limited price | Infosys Limited Quote

Accelerated Digital Transformation Drives Growth

Infosys has been strengthening its core competencies by pursuing collaborations and acquisitions. Its alliance strategy is targeted at teaming up with leading technology providers, enabling it to capitalize on the emerging technologies in a mutually-advantageous and cost-competitive manner.

Of late, the company has been gaining from large deal wins and fast-growing digital services. It reported revenues of $4 billion in the second quarter of fiscal 2022, up 20.7%, primarily due to large deal wins.

During the fiscal second quarter, the next-generation digital and consulting service major signed multiple large deals worth $2.15 billion. Digital revenues accounted for more than 56% of its total revenues.

With the pandemic accelerating the digital transformation process, the latest Mordor Intelligence report states that the global digital transformation market is expected to reach $2.74 trillion by 2026 from $999 billion in 2020, indicating a CAGR of 17.4%.

Infosys has been reinforcing its digital-transformation capabilities for expanding and solidifying the firm’s position in the highly competitive environment. Infosys is enabling its clients across more than 45 countries to create and execute strategies for their digital transformation.

However, Infosys is suffering from the increasing anti-outsourcing sentiments in certain countries. Higher subcontractor costs, and the company’s compensation revision with a higher variable pay and incentives are weighing on margins. Further, the currency volatility between the Indian rupee and the U.S. dollar is a major concern.

Zacks Rank & Stocks to Consider

Currently, Infosys carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader technology sector include Google-parent Alphabet GOOGL, Diodes DIOD and PTC Inc. PTC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Alphabet’s fourth-quarter 2021 earnings has been revised downward by a penny to $26.71 per share over the past 30 days. For 2021, earnings estimates have moved upward by 43 cents to $108.29 per share in the last 30 days.

Alphabet’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 41.5%. The GOOGL stock has rallied 68.9% year to date (YTD).

The Zacks Consensus Estimate for Diodes’ fourth-quarter 2021 earnings has been revised upward by a couple of cents to $1.45 per share over the past 30 days. For 2021, earnings estimates have moved upward by 2.4% to $5.06 per share over the past 30 days.

Diodes’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 10%. Shares of DIOD have rallied 57.6% YTD.

The consensus mark for PTC’s first-quarter fiscal 2022 earnings has been revised downward to $1.00 per share from $1.05 30 days ago. For fiscal 2022, earnings estimates have been revised downward by 4 cents to $4.19 per share in the last 30 days.

PTC’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 47.8%. Shares of PTC have increased 0.8% YTD.

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