Infosys is the big stock in focus today. The share price of Infosys is down 6%, falling to a 5-year low, after the Q4 results. Brokerages are divided on their call. Nomura rated the stock Buy and retained it as their top pick, while Jefferies has cut the target price, implying limited upside in the near term. Motilal Oswal too has a cautious view despite the ‘Buy’ call.
Here is a detailed analysis of the investment rationale driving brokerage views on the stock at the moment.
Jefferies on Infosys: ‘Hold’, target price cut
The international brokerage house Jefferies has cut the target price to Rs 1,235 from Rs 1,290, which is almost near the current market price. They have a ‘Hold’ rating on the stock. According to them, Infosys’ Q4FY26 results were in line with estimates. However, weaker-than-expected growth guidance of 1.5%-3.5%, 3% QoQ decline in headcount and 19% YoY decline in net-new deal wins disappointed.
Nonetheless, the brokerage house raised FY27-28 EPS estimates by 1-2% due to foreign exchange and expects Infosys to deliver 7% recurring EPS CAGR over FY26-29. While a 4.3% dividend yield is likely to cap downsides, a worsening growth outlook is likely to limit the scope for PE re-rating.
Motilal Oswal on Infosys: ‘Buy’
The domestic brokerage house, Motilal Oswal Financial Services, maintained its ‘Buy’ rating, with a target price of Rs 1,450, looking at an upside of over 17%.
The brokerage cut its FY27-28 EPS estimates by 2–4% to reflect lower growth assumptions and continued pricing pressure from AI-led deflation, partly cushioned by lower taxes. Near-term growth remains constrained, with guidance implying 2.5% organic growth.
Infosys’ guidance reflects increasing pressure on the existing book of business. AI is now compressing the existing book of business, said the brokerage. While part of this is attributable to competitive intensity and pricing in a low-demand environment, expectations are that the impact of deflation will continue as AI productivity benefits are passed on to clients.
“While execution on deal conversion and pricing remains a key monitorable, Infosys’ positioning across AI-led transformation and cost optimisation programs should support gradual improvement over the medium term,” said Motilal Oswal.
| Brokerage | Rating | Target Price | Key Sentiment |
| Nomura | Buy | Rs 1,640 | Top pick; stable margins expected. |
| JM Financial | Buy | Rs 1,500 | TCV growth is strong; guidance is cautious. |
| Motilal Oswal | Buy | Rs 1,450 | AI-led deflation is a risk, but medium-term looks good. |
| Jefferies | Hold | Rs 1,235 | Limited upside; headcount and deal wins are a worry. |
Nomura on Infosys: Top pick in large-cap IT
Nomura also reiterated ‘Buy’ on Infosys and said that the stock continued to remain its top pick in the large-cap IT segment. Nomura has a target price of Rs 1,640, implying an upside of over 32% from current levels.
The international brokerage house highlighted that Infosys’ Q4 EBIT margin of 21% was down 20 bps QoQ and was driven by headwinds from acquisition amortisation (50 bps), normalisation of a Q3 one-off gain (30 bps), and compensation costs (20 bps), partially offset by currency tailwinds (40 bps). There was a 30 bos impact on margins as a result of Project Maximus, too.
Infy noted that it has not decided on the salary hike cycle yet, after the last one in January and April 2025. Nomura expects EBIT margins to be largely stable at 21% in FY27F vs the guided band of 20-22%.
JM Financial on Infosys: ‘Buy’
JM Financial cut the target price to Rs 1,500 from Rs 1,525, implying an upside 21% from the current market price. The brokerage house, however, retained a ‘Buy’ rating.
The company’s last twelve months (LTM) large deal TCV grew 28% YoY in FY26 versus a decline of 34% in FY25 (LTM book-to-bill of 0.74x in FY26 versus 0.60x in FY25). “The lower end of guidance factors demands deterioration, while the top-end factors demand improvement,” said Motilal Oswal.
Infosys share price performance
The share price of Infosys has declined 6.8% in the last five trading days. The stock has slipped 3.6% in the past one month and 19.25% in the last six months. Infosys’s share price has erased over 16% of investors’ wealth over the previous 12 months.