The improved outlook stands out against a challenging backdrop for major Indian IT services providers, which continue to face cautious customer spending, slower decision cycles and continued margin pressure from regulatory and payroll-related costs.The optimism came despite a mixed set of quarterly figures. Infosys reported a 2% year-on-year decline in consolidated net profit to Rs 6,654 crore for the December quarter, compared to Rs 6,806 crore a year earlier, while revenue from operations rose 9% to Rs 45,479 crore. In addition to the upgrade in expectations, the company maintained its margin outlook at 20-22% for FY26.
Indian stock markets are closed for trading today due to the municipal elections in Maharashtra.
Should you buy, sell or hold?
Jefferies, which has a buy call and a price target of Rs 1,880 per share, sees an upside potential of 17% from current levels. The global brokerage believes Infosys’ upgraded FY26 constant currency revenue growth of 3-3.5% largely reflects the outperformance in the third quarter rather than an improvement in demand in the fourth quarter, even as management commentary remained upbeat.
With the fourth quarter growth outlook largely in line with what was previously indicated for the second half of FY26, Jefferies believes the revision is mainly driven by the third quarter. The company has raised revenue estimates by up to 1% and expects Infosys to achieve a recurring CAGR of 7.5% over FY26-28.
Nomura reiterated its bullish stance on Infosys, maintaining a buy rating and price target of Rs 1,810 as it continued to position the stock as the top choice for large companies in Indian IT services. The broker noted that the company posted an increase in sales in Q3’26, supported by steady demand, even as margins remained marginally below expectations.
While consolidated net profit declined year-on-year, revenue growth in both rupees and dollars exceeded consensus estimates. Nomura views overall performance as resilient, with execution strength offsetting near-term margin pressure.
Center remains positive on Infosys and maintains a buy rating with a target price of Rs 2,076, implying an upside of 29%, citing continued traction in verticals such as BFSI and increasing adoption of AI-led services. The brokerage views 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 that disciplined margins, stable hiring and execution strength position Infosys well for steady growth, forecasting healthy CAGRs for revenue, EBITDA and earnings over the medium term.
Emkay reiterated his 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 new opportunities and accelerate growth as Infosys deepens partnerships and customer engagement.
Growth in the third quarter was led by Life Sciences, BFSI and Manufacturing, with Europe standing out geographically. Strong momentum from large deals, including several mega deals, reinforces Emkay’s confidence in the company’s ability to capture market share despite short-term volatility in certain segments.
On the other hand, Antique maintained a Hold rating on Infosys with a target price of Rs 1,780 after better-than-expected Q3 performance that prompted an upgrade in guidance. The broker highlighted that the revised guidance for FY26 implies moderate to modest growth in the fourth quarter, reflecting continued caution in discretionary spending. However, Infosys’ ability to gain market share and management’s expectation that CY26 will improve versus CY25 support the medium-term outlook. As the stock has fallen sharply over the past year, valuations have normalized closer to long-term averages, prompting Antique to marginally increase earnings per share estimates and 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 expressed by the experts are their own. These do not represent the views of The Economic Times)
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