1 week ago
Shares of technology bellwether Infosys Ltd., India's second-largest IT services company, will be reacting to their quarterly results, which were reported after market closing last Thursday. The stock has already declined 25% so far in 2025, despite a 9% recovery from its recent 52-week low.
Most analysts having coverage on the stock have cut their price targets post the results, but some have still reiterated the stock to be their top pick within the IT sector.
HSBC has maintained its "buy" rating on Infosys but cut its price target to ₹1,700, saying that its FY26 guidance for growth in the current environment is "quite optimistic".
Although it said that margins are manageable in the near-term, rupee will remain a key watch.
JPMorgan also remains "overweight" on the stock with a price target of ₹1,800. It said that although the organic guidance was below prior expectations, it is better than the recently feared post-tariff uncertainty impact flagged by Wipro's results.
It finds the new guidance to be largely de-risked, with multiples returning to its 10 to 20-year averages.
Citi remains "neutral" on Infosys with a price target of ₹1,525.
The brokerage called the higher end of the company's guidance for FY26 to be "aggressive" in the current backdrop.
Therefore, it has cut its FY26 and FY27 Earnings Per Share (EPS) estimates by 2% to 3% and target multiple to 22x from 23x to reflect the lower revenue growth.
Infosys reported a US Dollar revenue decline of 4.2%, which was sharply lower than the street anticipation of a 1.4% drop. Its constant currency revenue also fell 3.5% sequentially, which was worse than its peers, TCS and Wipro, both of whom saw a decline less than 1%.
For financial year 2026, Infosys expects revenue growth between 0% and 3% in constant currency terms, whereas estimates ranged between 1% and 4%.
In its post-earnings interaction, the management of Infosys said that the current environment is uncertain and that the bottom-end of the guidance bakes in that deterioration, while the top end assumes a steady to slight improvement.
According to a CNBC-TV18 analysis, Infosys reported a 1.8% rise in its net profit for the full financial year, which is the second-slowest earnings growth for the company since it went public in 1993.
The company also missed its full-year constant currency revenue growth forecast of 4.5% to 5%, by delivering a revenue growth of 4.2%.
In response, shares of Infosys listed on Wall Street had the first reaction to its results, declining as much as 4.5% in intraday trade. The stock, however, pared some of those losses to end 2.5% lower.
The India-listed shares of Infosys opened lower on Thursday, but clawed back its losses to end at the highest point of the day, at ₹1,427.7, up 1%.
