Overnight, Infosys American Depositary Receipts (ADRs) rose 10% following the guidance upgrade.
The improved outlook stands against a challenging backdrop for large-cap Indian IT services companies, which continue to face cautious client spending, slow decision-making cycles and persistent margin pressure from regulatory and wage-related costs.
The optimism came despite a mixed set of quarterly figures. Infosys reported a 2% year-on-year decline in consolidated net profit in the December quarter, from Rs. 6,806 crore as against Rs. 6,654 crore, while income from operations rose 9% to Rs. 45,479 crores. Along with the guidance upgrade, the company maintained its margin outlook for FY26 at 20-22%.
Indian stock markets are closed for trading today due to Maharashtra municipal elections.
Should you buy, sell or hold?
Jefferies, which has a buy call and a share price of Rs. With a target price of 1,880, it sees upside potential of 17% from current levels. The international brokerage believes Infosys’ upgraded FY26 constant-currency revenue growth guidance of 3-3.5% largely reflects Q3 outperformance rather than an improvement in Q4 demand, even as management commentary remains upbeat.
With Q4 growth guidance in line with what was previously indicated in the second half of FY26, Jefferies sees a revision mainly driven by the Q3 beat. It raised revenue estimates by up to 1% and expects Infosys to deliver a recurring EPS CAGR of 7.5% in FY26-28.
Nomura reiterated its bullish stance on Infosys, with a buy rating and Rs. The stock continues to rank as its top large-cap pick in Indian IT services, maintaining a target price of 1,810. The brokerage noted that the company grew revenues in Q3FY26, supported by steady demand, though margins were lower than expected.
While consolidated net profit fell year-on-year, revenue growth in both rupee and dollar terms exceeded consensus estimates. Nomura sees overall performance as resilient, with execution strength offsetting near-term margin pressure.
Centrum remains positive on Infosys, Rs. Maintains a Buy rating with a target price of 2,076, suggesting an upside of 29%, citing continued traction in verticals like BFSI and growing adoption of AI-led services. The brokerage sees the guidance upgrade as a sign of management’s confidence in the demand environment, supported by a strong deal pipeline and large deal wins.
While macro and regulatory uncertainties remain, Centrum believes that disciplined margins, steady hiring and strong execution position augur well for Infosys steady growth, forecasting a healthy CAGR in revenue, EBITDA and profit over the medium term.
Amka Rs. Reiterated its buy call on Infosys with a target price of 1,750, with management’s focus on six AI-based value pools as key drivers of long-term growth. These emerging sectors are expected to open up growth opportunities and accelerate growth as Infosys deepens partnerships and client engagement.
Q3 growth was led by life sciences, BFSI and manufacturing, while Europe stood out geographically. Strong large deal momentum, including multiple mega deals, reinforces MK’s confidence in the company’s ability to capture market share despite near-term volatility in certain segments.
On the flipside, antiques cost Rs. Maintained a hold rating on Infosys with a target price of 1,780, prompting a guidance upgrade following better-than-expected Q3 performance. The brokerage highlights that the revised FY26 guidance suggests muted-to-modest sequential growth in Q4, reflecting continued caution in discretionary spending. However, Infosys’ ability to gain market share and management’s expectation of improvement in CY26 over CY25 support the medium-term outlook. As the stock has fallen sharply over the past year, valuations have normalized near long-term averages, prompting Antiques to raise EPS estimates and its valuation multiple marginally.
Infosys shares on NSE at Rs. 1,609, down 0.6% from the previous close at Rs.
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)
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