The window for Infosys Buyback closed on November 26. As per data from the Bombay Stock Exchange (BSE), shareholders submitted bids for around 82.61 crore shares, even though the buyback size was limited to 10 crore shares. This means the offer was oversubscribed by about 826%. The stock is likely to remain in the spotlight after brokerage firm Jefferies reiterated its positive view on the information technology company. According to the brokerage report, Jefferies has maintained a ‘Buy’ rating and set a target price of Rs 1,530. This indicates an 11% upside from current levels.
While the rating remains unchanged, the report outlined several factors shaping Infosys near term growth and how the company is approaching the ongoing shift toward Artificial Intelligence (AI).
Let’s take a look at the three key reasons why the brokerage is bullish this IT sector stock and what is the rationale behind it –
Strong position in Artificial Intelligence
According to the brokerage report, Infosys believes it is well placed in the Artificial Intelligence (AI) cycle, supported by industry rankings and its presence in major banking clients.
However, the company noted that “enterprise AI adoption is taking place at a slow pace.” Infosys also pointed out that “while point solutions or Proof-of-Concepts (PoCs) work well individually, outcomes are below expectations when these are integrated together.”
Companies need to upgrade older technology systems to fully use AI, and many are delaying these investments because of weak economic conditions and uncertainty around returns. Despite this, the brokerage believes Infosys positioning gives it an early advantage once adoption picks up.
Demand environment stable with steady deal activity
The brokerage noted that Infosys has seen a stable demand backdrop even though clients remain cautious. The management stated that “the demand environment has remained steady and has not worsened,” but discretionary spending continues to be under pressure.
Infosys also highlighted that “any new technology cycle leads to revenue pressures and Infosys is witnessing the same trends play out in Generative Artificial Intelligence (GenAI) as well.”
Even with this cautious spending, deal wins remain strong, especially in the Banking, Financial Services and Insurance (BFSI) segment, giving the brokerage optimism in the company’s medium-term order pipeline.
Margin levers and strong Free Cash Flow support outlook
Infosys continues investing in reskilling its workforce and emphasised that “human intervention is key to technology adoption.” The company has also used Generative Artificial Intelligence in its internal systems to improve productivity, helping strengthen margins, as per the brokerage report.
Better pricing and lower third-party costs are additional margin levers, according to the brokerage report. The company also expects strong cash generation to continue, with management noting that “Free Cash Flow (FCF) will remain above 100% of net profit in FY26.”