Infosys: Is the ‘poster boy’ of IT now a value buy at 52-week lows?

However, over the past few months, investors have become increasingly worried about the expanding role of AI and its potential to disrupt the business model of Infosys and other leading IT services players in India and overseas including HCL Tech, and Dublin-based Accenture, respectively.

As a result, Infosys, which gained nearly 2% in mid-Friday trading to Rs 1,314.5, was hovering just above its 52-week low of Rs 1,265 that was reached on 24 February, 2026.

Similarly, HCL Tech was up 1.5% to Rs 1,393.8 on Friday, and not too far from its 52-week low of Rs 1,304 that was reached on 7 April 2025.

Infosys Topaz: The AI Strategy for 2026

A few days earlier, Infosys, the second-largest Indian IT services company, highlighted its strategy to expand in the fast-growing AI-related segment.

The Bengaluru-based company unveiled its AI first value framework to help global enterprises use AI on a large scale and harness the power of its generative and agentic AI suite, Infosys Topaz.

The company highlighted that this software would help it plan an AI strategy for clients as well as transform existing businesses and analyse data. Infosys Topaz is expected to help the Bengaluru-based company get a meaningful share of the incremental revenue of $300 billion AI-related services by 2030.

Nandan Nilekani, co-founder and chairman, Infosys, in a press release, said, “With over four decades of experience in guiding clients through technology shifts, Infosys is uniquely positioned to orchestrate AI across complex ecosystems and unlock significant value from the expanding global AI services opportunity.”

It does not end there. Infosys had recently collaborated with the leading US-based player in AI, Anthropic, and it integrates the latter’s Claude models, including Claude Code, with Infosys Topaz AI offerings. The above tie-up would help enterprises to automate complex workflows, accelerate software delivery, and adopt AI in tune with regulations of a country.

The above measures are expected to significantly expand Infosys presence in AI-related services over the next few quarters.

Share of AI-related revenues

At a recent Investor Day conference, Salil Parekh, CEO of Infosys, highlighted that AI contributes 5.5% of their revenues. Infosys generated $ 15.1 billion in overall revenues from the first nine months of FY26.

Parekh also pointed out that for 90% of their top 200 clients they are working on AI-related projects.

Infosys, in the December 2025 quarter results, highlighted that it is working on AI-related work with leading global clients including Lufthansa, US-based Nu Skin and US based-Barry Callebaut, a chocolate and desserts company, amongst others.

Also, in its annual report for FY25, Infosys has also pointed out that it has successfully delivered over 400 AI-related projects in diverse areas including process improvement, engineering, customer service, cybersecurity, and employee productivity.

Smaller rival, HCL Tech Advanced AI quarterly revenue at $146 million (nearly Rs 1,314 crore) in the December 2025 or 3.9% its Rs 33,872 crore revenues in the quarter under review.

Performance in the December 2025 quarter

Earlier, Infosys reported a disappointing growth of 0.6% on a constant currency basis on a quarter-on-quarter basis in its revenues from operations to Rs 45,479 crore in the December 2025 quarter.

It must be highlighted that the third quarter is typically a seasonally weak quarter, given the holiday season in North America and Europe

And while Infosys’ key financial services segment accounted for 28.2% of its revenues in the December 2025 quarter vis-a-vis 27.7% in the September 2025 quarter, however, it faced sluggish growth in other verticals like energy, utilities, resources, along with hi-tech.

Smaller rival, HCL Tech reported a 4.2% q-o-q constant currency growth in its revenues to Rs 33,872 crore in the December 2025 quarter, and it highlighted a strong 28.1% q-o-q constant currency growth in its smaller, HCL Software in Q3FY26 – this division includes subscription and support revenue including all term subscription revenues, support revenues (including those attributable to perpetual licenses) and software-as-a-service (SaaS) revenues.

Meanwhile, Infosys’ core operating profit margin shrank 30 basis points q-o-q to 23.4% in the December 2025 quarter, and that was owing to higher employee costs.

Like other IT companies that have reported results, Infosys also had a one-time impact of labour code amounting to Rs 1,289 crore in the December 2025 quarter. As a result, its net profit fell nearly 9.6% quarter-on-quarter to Rs 6,666 crore in the December 2025 quarter.

HCL Tech’s net profit fell 3.6% q-o-q to Rs 4,082 crore in the December 2025 quarter, and that was due to a one-time impact of Rs 956 crore relating to the new labour code.

Guidance – A Glimpse into FY26

Infosys has provided for a marginally better guidance – it has now provided a revenue growth guidance of 3%-3.5% in constant currency for FY26 as compared to its revenue growth guidance of 2-3 % in constant currency for FY 26 while declaring Q2FY26 results.

The growing role of AI-related revenues has helped to power the above upgraded revenue guidance for FY26.

Earlier, HCL Tech had also marginally raised its growth guidance – it expects its services revenue growth to be between 4.75-5.25 % y-o-y in constant currency for FY26 vis-à-vis its forecast of 4-5 % y-o-y in constant currency during FY26 while declaring its September 2025 quarter results.  

Valuation Duel: Infosys vs HCL Tech

Infosys is trading at a consolidated P/E of 18.5, and over the past 10 years it has traded between 14.3 times and 38.4 times. The stock is trading towards the lower end of the range, given the negative sentiment on the street for IT stocks.

The company has already declared an interim dividend of Rs 23 for the current financial year, and it also offers a dividend yield of nearly 1.8%.

The New Delhi-based HCL Tech trades at a consolidated P/E of 22, and over the past 10 years it has traded between 17.6 times and 33 times. HCL Tech has declared an interim dividend of Rs 42 per share, or a near 3% dividend yield.

It does appear that Infosys trades at very reasonable valuations, and Dalal Street appears overly bearish on the stock. Investors who can look beyond the current AI-related pessimism and keep their faith in the well-respected management of the Bengaluru-based company can add this stock to their watchlist of 2026.

Disclaimer:

Amriteshwar Mathur is a financial journalist with over 20 years of experience.

The writer and his family have no shareholding in any of the stocks mentioned in the article.

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