Infosys share price is down 2% on commentary from global IT major, Accenture. According to Accenture, clients are diving head-first into GenAI-led programs in contrast to Indian vendors’ stance that deals still remain centered around cost takeout. However, Jefferies has a Buy rating on Infosys.
The target price, though, is Rs 1,660 per share for Infosys and implies only 5% upside from current levels This is because of the key risks including “weaker revenue growth, lower margin, unfavourable currency,” as per Jefferies.
Jefferies on Infosys: AI to usher in workforce transition
Some of the key reasons supporting the positive call is Infosys’ AI approach. The tech major is navigating the shift to AI-augmented delivery with strategic foresight. Infosys has been early in adopting AI across its service lines, starting nearly three years ago. Jefferies pointed out that “the company has mapped technologies and is actively re-skilling talent.” Infosys believes that AI will usher in a huge workforce transition, enabling employees to become full-stack engineers/citizen developers rather than having skills locked in traditional silos. They expect higher demand for computer science engineers as a larger part of the workforce may require a programming background.
Jefferies on Infosys: Impact of AI on business
Innovations such as Deepseek and model distillation have accelerated AI adoption, while Agentic AI is helping manage complex business processes. As AI becomes mainstream, Jefferies outlined that the role of the CIO has evolved from just managing tech budgets to orchestrating enterprise-wide transformation. They see “Infosys well-positioned to support this shift with its consultative pedigree and execution strength.” Infosys is seeing increased demand for cost savings from clients in a few verticals though clients are reinvesting AI driven productivity gains into modernization initiatives. According to the brokerage house, “Change management and successful orchestration remain the key challenge to enterprise AI adoption.”
Jefferies on Infosys: Focus on delivery
Infosys believes that service-line (horizontal) based delivery organization can be scaled more efficiently. According to Jefferies, “Infosys has built deep client relationships often lasting 25-30 years and delivery excellence has been among the key reasons for its success.” Besides measuring financial metrics, Infosys has set up early-warning systems which measure effort overruns and flag projects where milestones are being missed for early and effective intervention to ensure delivery quality and timeliness. This, as per Jefferies, will help maintain the edge.
Jefferies on Infosys: Risk management for large deals
The other key factor, as per Jefferies is the focus on risk management, especially for large deals. Infosys has built a structured approach to managing risks through a dedicated deal risk team led by the Chief Risk Officer. The tech major has strengthened its risk management framework and refrains from signing contracts with overly stringent terms. Jefferies pointed out that “large/mega deals bring in an additional layer of complexity and Infosys’ experience in delivering this has shaped a more structured approach to deal-making.” Additionally, the senior leadership’s active involvement in overseeing large deals and productivity benefits, adds to the factors supporting the positive recommendation.