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Mumbai: Infosys Ltd on Monday became the fourth Indian firm to hit the 6 trillion in market capitalisation after its shares surged over 141% in the last one year.

The stock touched an all-time high of 1,425 on BSE with a market cap of 6.05 trillion. The scrip closed at 1,410.15, up 1.8% from its previous close. So far this year, it has gained over 12%.

Earlier, Reliance Industries Ltd, Tata Consultancy Services Ltd and HDFC Bank Ltd have achieved this milestone.

Infosys will report its March quarter earnings on 14 April. According to a poll of 15 analysts' estimates by Bloomberg, the firm is expected to post a revenue of 26,397.90 crore, while net profit is seen at 5,168.30 crore.

IT companies across the board have started acknowledging that the margin improvement is more structural than anticipated earlier.

"Indian IT Services are seeing improvement in demand as businesses globally have accelerated their digital transformation journey in the backdrop of Covid-19. This is fueling improvement in revenue growth for the sector and also the shift towards higher offshoring", JM Financial said in its 23 March report.

Analysts estimate margins of key blue-chip IT companies to improve 250–350bps in the next three years over FY20 levels and believe current consensus earnings forecasts are still 10–25% lower, even in the base-case scenario.

"We continue to find greater evidence on demand strength and would not rule out further upgrade to FY22E growth expectations post 4QFY21 results. However, some of the supply side challenges could emerge from 2HFY22 onwards. We thereby continue to play the up cycle through select bets – Infosys, HCL Tech are our top picks amongst Tier I techs", JM Financial report added.

Infosys in its December quarter earnings said that it has secured 22 large deals with an all-time high total contract value (TCV) of $7.13 billions of which 73% is net new TCV.

Infosys has confirmed that the deal-pipeline remains strong. Given the momentum in large deal-wins and pipelines it has increased its FY21 revenue growth guidance to 4.5%-5% vs. 2%-3% earlier and is confident of a double-digit growth in FY22.

"We have factored in USD revenue growth of 7/16.1/12.9% for FY21/22/23E with 4QFY21 at 3.5% QoQ. EBIT margin factored in at 23.9% for 4Q and 24.1/24.5% for FY22/23E, leading to 20% EPS CAGR over FY21-23E '' according to HDFC Securities report. HDFC Securities has given buy rating on the stock with a target price of 1630 a share.

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