Infosys shares will be in focus in Thursday’s trade after the company posted strong quarterly results in Q1 FY26. The highlight was the increase in the lower band of the revenue growth guidance, which came on the back of large deal bookings. Over 50% deal bookings were net new.
Here’s how international brokerage house Jefferies analysed the numbers-
Jefferies on Infosys: Bookings came in strong, leading to increase in growth guidance
Infosys’ Q1FY26 results came ahead of estimates, with higher-than-expected revenue growth of 2.6% sequentially in constant currency terms being the key positive surprise.
Not just that, the large deal bookings at $3.8 billion were healthy as more than 50% of the deals, which is $2.1 billion, were net new. This resulted in Infosys raising the lower end of its FY26 growth guidance by 100 basis points to 1-3%.
Given that Infosys’s revised growth guidance includes 40 bps of growth due to acquisitions, it has effectively lowered the upper end of its FY26 organic growth guidance from 3% earlier to 2.6% at present, said Jefferies.
“This implies a CQGR of -0.4% to 1.0% over remaining FY26 and seems conservative at the lower end, especially in context of strong deal bookings,” added Jefferies.
The IT giant’s margins in Q1 were down 15 bps QoQ to 20.8%. Gross margins rose 20 bps QoQ as lower pass-through costs (-60 bps) were partly offset by higher subcontracting costs. Jefferies said retention of margin guidance of 20-22% for FY26 was in line with expectations.
The brokerage maintained its ‘Buy’ rating on the stock, with a target price of Rs 1,660, implying an upside of 6%.
Infosys Q1FY26
Infosys reported 9% YoY growth in its consolidated net profit at Rs 6,921 crore for Q1FY26. Its revenue increased by 8% YoY to Rs 42,279 crore. Also, the company raised its lower end of revenue growth guidance, which is pegged at 1-3% in constant currency for FY26 from 0-3%.
The company had won deals worth $3.8 billion, out of which 55% were net new.
Operating margin for the April-June quarter stood at 20.8%, contracted by 0.3% YoY and 0.2% QoQ. The company estimates the operating margin to remain in the range of 20-22% for FY26.
Infosys stock performance
The share price of Infosys has fallen 3% in the last five trading sessions. The stock price of the IT giant has declined by 1.5% in the past one month and more than 16% in the last six months. Infosys’ share price has erased 15% of investors’ worth in the past one year.