Next 6-12 months:
Global economic slowdown: A recession in key markets (US, Europe) could reduce IT spending. Best case scenario revenue can grow 10% YoY max, given forecast recently of 4% growth.
Rising employee costs will squeeze margins along with competition from other IT services companies (Accenture, TCS, Wipro). Adapting to new technologies (AI, cloud, automation) and client demand for them will be impactful for cashflow.
5-year outlook:
Continued shift towards cloud, AI, and automation will drive demand. US political and economic stability will be low impact for Infosys but there is risk, so discount rate is increased.
Infosys is a well-established global IT services provider with diverse solutions across various industries, and access to a vast talent pool.
Growing demand for digital services, cloud adotpion and AI offers significant growth potential, playing against other factors squeezing margins.
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