Infosys Ltd
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Infosys is navigating a challenging landscape, marked by a significant downgrade in its FY27 organic revenue growth guidance to 1.5-3%, primarily due to client-specific issues and competitive pricing pressures. Despite these near-term challenges, management remains optimistic about long-term growth, particularly in AI services, which now contribute 8.2% of total revenue and are expected to drive future expansion. The company is strategically investing in AI capabilities, planning to hire 20,000 freshers and expand its workforce of frontier engineers, which positions it well to capitalize on the projected $300-400 billion AI-first services opportunity by 2030. However, the competitive environment remains intense, with risks from AI-led deflation impacting traditional revenue streams. Overall, while Infosys faces execution risks and macroeconomic uncertainties, its focus on AI and large deal pipelines suggests potential for recovery and growth in the medium to long term
Why We Like This Stock
- Strong growth in AI services, now contributing 8.2% of total revenue, indicates a strategic pivot towards high-demand areas
- The robust pipeline of large deals, with a total contract value of $14.7 billion, provides visibility for future revenue
- Management's commitment to expanding its workforce and capabilities in AI positions Infosys to capture significant market opportunities
Things To Watch Out For
- Significant downgrade in FY27 organic revenue growth guidance reflects immediate challenges from client-specific issues and competitive pressures
- Intensifying competition and AI-led deflation are compressing traditional revenue streams, impacting margins
- Macroeconomic uncertainties and cautious client spending are leading to slower decision-making and reduced discretionary IT spending
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 153,670 | 162,990 | 178,650 | 188,379 | 199,605 |
| Profit Before Tax (Cr.) | 35,703 | 37,317 | 41,284 | 42,383 | 45,025 |
| PBT Margin | 23.2% | 22.9% | 2310.9% | 22.5% | 22.6% |
| Net Profit (Cr.) | 27,390 | 25,281 | 29,138 | 30,043 | 31,879 |
| Earnings Per Share | 67.6 | 62.3 | 71.9 | 74.1 | 78.7 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Anand Rathi | ▲ Buy | 1,270 | 24-Jul-2026 |
| Axis Securities | ► Hold | 1,330 | 24-Apr-2026 |
| BofA | ▲ Buy | 1,300 | 24-Jul-2026 |
| CLSA | ▲ Outperform | 1,109 | 24-Jul-2026 |
| Choice Equity | ▲ Buy | 1,500 | 24-Apr-2026 |
| Citigroup | ► Add | 1,080 | 30-Jun-2026 |
| DAM Capital | ► Add | 1,300 | 24-Apr-2026 |
| Elara Capital | ► Accumulate | 1,150 | 24-Jul-2026 |
| Goldman Sachs | ► Hold | 1,140 | 30-Jun-2026 |
| HDFC Securities | ▲ Buy | 1,550 | 24-Apr-2026 |
| HSBC | ▲ Buy | 1,110 | 24-Jul-2026 |
| ICICI Securities | ▼ Reduce | 940 | 24-Jul-2026 |
| IDBI Capital | ► Hold | 1,137 | 24-Jul-2026 |
| JPMorgan | ► Neutral | 1,050 | 24-Jul-2026 |
| Jeffries | ► Hold | 1,020 | 24-Jul-2026 |
| Kotak Securities | ▲ Buy | 1,200 | 24-Jul-2026 |
| Moneycontrol | ► Equalweight | nan | 24-Jul-2026 |
| Morgan Stanley | ► Equalweight | 1,105 | 24-Jul-2026 |
| Motilal Oswal | ▲ Buy | 1,170 | 24-Jul-2026 |
| Nomura | ▲ Buy | 1,290 | 24-Jul-2026 |
| Prabhudas Liladhar | ▲ Buy | 1,570 | 24-Apr-2026 |
| UBS | ▲ Buy | 1,425 | 24-Apr-2026 |
Company Overview
Show Company Profile
Infosys Limited provides consulting, technology, outsourcing, and digital services worldwide. The company offers insight services, such as applied and generative AI, sustainability services, and Infosys Topaz, an AI-first set of services, solutions, and platforms; blockchain, Internet of Things, and engineering services; cybersecurity and quality engineering services; and enterprise agile DevOps, API economy and microservices, application modernization, and digital process automation. It also provides digital supply chain, Microsoft business application services, Microsoft cloud business, Oracle, SAP, service experience transformation, Salesforce, energy transition, network transformation services, infrastructure services, global capability center, and Infosys Cobalt, a suite of services, solutions, and platforms. In addition, the company offers experience services, including digital marketing, digital commerce, digital interactions, digital workplace services, digital experience, metaverse, and Infosys Aster, a marketing suite; and EdgeVerve, Infosys Finacle, Infosys Live Enterprise Suite, Infosys Cortex, Infosys Meridian, Panaya, Infosys Equinox, Infosys Topaz Fabric, Infosys Wingspan, Infosys Helix, and Infosys Polycloud platforms. It serves aerospace and defense, agriculture, automotive, chemical manufacturing, communication services, consumer packaged goods, education, engineering procurement and construction, financial services, oil and gas, private equity, professional services, public sector, healthcare, high technology, industrial manufacturing, information services and publishing, insurance, life sciences, logistics and distribution, media, entertainment, mining, retail, semiconductor, travel and hospitality, utilities, and waste management industries. The company was formerly known as Infosys Technologies Limited and changed its name to Infosys Limited in June 2011. Infosys Limited was incorporated in 1981 and is headquartered in Bengaluru, India.