Shares of Infosys, a major player in India’s IT sector, rallied 4.86% to an intraday high of Rs 1,677.60 on the NSE on Friday, January 16, after the company raised its FY26 constant-currency revenue growth guidance to 3-3.5% while maintaining its operating margin forecast at 20-22%."Infosys delivered a resilient Q3 despite seasonality, supported by strong large-deal momentum with $4.8 billion TCV from 26 deals, The company is focusing on six Al value pools-including Al engineering, data for Al, Al agents for operations, Al-led software development and legacy modernization, Al with physical devices, and Al services where it is well positioned to gain market share and emerge as a leading Al value-creator. Infosys expects stronger growth in FY27, led by the Energy & Utilities vertical and a pickup in discretionary spending in BFSI," Choice stated.
"Given the strong large deal momentum and positive outlook, we have revised our estimates. Thus, we expect Revenue, EBIT and PAT to expand at a CAGR of 10.2 per cent, 11.8 per cent and 10.8 per cent, respectively, over FY25-FY28E and maintain our BUY rating with a revised target price of Rs 1,865 implying a 22x multiple on the average of FY27E and FY28E EPS of Rs 84.8,"At current levels, the target prices suggested by the brokerages imply an upside potential of up to about 19 per cent from Wednesday's closing price. CLSA reiterated its ‘Outperform’ rating on Infosys, assigning a target price of Rs 1,779 per share, which implies an upside of about 11 percent. The brokerage highlighted the company’s upward revision of FY26 revenue growth guidance to 3-3.5 percent in constant-currency terms from 2-3 percent earlier, alongside strong deal wins, steady revenue growth and in-line margins. CLSA said the guidance upgrade in a seasonally weak quarter reinforces confidence in execution and points to improving demand conditions.
HSBC also maintained a ‘Buy’ rating on Infosys with a higher target price of Rs 1,870 per share, implying an upside of about 16 percent. The brokerage cited improved clarity on the impact of artificial intelligence on client spending and strengthening demand commentary. HSBC said sentiment around IT demand has improved further, particularly in the banking and energy verticals, aided by stabilising US corporate sentiment and rising client interest in AI-led transformation and platform modernisation initiatives.
Brokerage notes also pointed to management commentary indicating early green shoots in discretionary spending and a more constructive outlook for FY27, supported by AI-led programmes, vendor consolidation and platform modernisation deals. While some verticals, such as manufacturing and hi-tech, remain under pressure, analysts said the overall demand narrative has turned incrementally more positive. Ahead of the Q3 results announcement, Infosys shares had closed 0.6 percent higher at Rs 1,608.9 on the NSE. The stock remains down over 17 percent over the past one year, sharply underperforming the Nifty 50’s roughly 11 percent gain over the same period.