Overnight, Infosys American Depositary Receipts (ADRs) surged 10% following the guidance upgrade.
The improved outlook stands out against a challenging backdrop for large-cap Indian IT services companies, which continue to face cautious client spending, slower decision-making cycles, and sustained margin pressures from regulatory and wage-related costs.
The optimism came despite a mixed set of quarterly numbers. Infosys reported a 2% year-on-year decline in consolidated net profit to Rs 6,654 crore for the December quarter, compared with Rs 6,806 crore a year earlier, while revenue from operations rose 9% to Rs 45,479 crore. Alongside the guidance upgrade, the company retained its margin outlook at 20–22% for FY26.
Indian stock markets are closed for trading today on account of the Maharashtra municipal elections.
Should you buy, sell or hold?
Jefferies, which has a Buy call and a target price of Rs 1,880 per share, sees an 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 remained upbeat.
With Q4 growth guidance broadly in line with what was earlier indicated for the second half of FY26, Jefferies sees the revision as driven mainly by the Q3 beat. It has raised revenue estimates by up to 1% and expects Infosys to deliver a 7.5% recurring EPS CAGR over FY26–28.
Nomura reiterated its bullish stance on Infosys, retaining a Buy rating and a target price of Rs 1,810, while continuing to position the stock as its top large-cap pick in Indian IT services. The brokerage noted that the company delivered a revenue beat in Q3FY26, supported by steady demand, even as margins came in marginally below expectations.
While consolidated net profit declined year-on-year, revenue growth in both rupee and dollar terms exceeded consensus estimates. Nomura views the overall performance as resilient, with execution strength offsetting near-term margin pressures.
Centrum remains positive on Infosys, maintaining a Buy rating with a target price of Rs 2,076, implying an upside of 29%, citing sustained traction in verticals such as BFSI and rising adoption of AI-led services. The brokerage sees the guidance upgrade as a signal of management’s confidence in the demand environment, supported by a strong deal pipeline and large deal wins.
While macro and regulatory uncertainties persist, Centrum believes disciplined margins, stable hiring, and execution strength position Infosys well for steady growth, forecasting healthy CAGRs across revenue, EBITDA, and profit over the medium term.
Emkay reiterated its Buy call on Infosys with a target price of Rs 1,750, highlighting management’s focus on six AI-led value pools as a key long-term growth driver. These emerging areas are expected to unlock incremental 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 Emkay’s confidence in the company’s ability to capture market share despite near-term volatility in certain segments.
On the flipside, Antique maintained a Hold rating on Infosys with a target price of Rs 1,780, following a better-than-expected Q3 performance that prompted a guidance upgrade. The brokerage highlighted that the revised FY26 guidance implies 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 CY26 improving over CY25 support the medium-term outlook. With the stock having declined sharply over the past year, valuations have normalised closer to long-term averages, prompting Antique to marginally raise EPS estimates and its valuation multiple.
Infosys shares closed at Rs 1,609 on the NSE, down 0.6% from the previous close.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
