Infosys, LTIMindtree, Wipro, Cyient, Indian Bank, L&T Finance, Kajaria, Nuvoco Q2 Review — HDFC Securities

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HDFC Securities Institutional Equities

Infosys - Deal wins encouraging; guidance factors a soft H2

Infosys Ltd. delivered a strong Q2 FY26 performance, delivering industry-leading sequential growth of 2.2% QoQ (organic ~2%) and 2.9% YoY in CC terms.

This robust H1 was accompanied by a large deal TCV of $3.1 billion, with a notable 67% being net new deals. The company signed a mega deal worth $1.6 billion, which is a net-new deal and 90% of the Q2 large deal TCV is net-new.

Infosys upgraded the lower end of its FY26 growth guidance for the second consecutive quarter from 1- 3% to 2-3% in CC terms. The upper end of the guidance is based on a stable environment, while the lower end accounts for elevated uncertainty.

The upper end of the guidance indicates a soft H2, which will be impacted by seasonal factors such as lower working days and furloughs. Financial Services and Manufacturing led the growth with >5% YoY CC in Q2 and H1.

Communications faced growth headwinds, while Retail and Manufacturing navigated macro and trade uncertainties. Across segments, client strategy is focused on cost efficiency programs and AI-driven initiatives.

Infosys is leveraging GenAI and its Topaz to drive productivity for clients and enable growth opportunities. Infosys’s net headcount increased by ~8,000 and it hired ~12,000 freshers in H1, citing capacity builtup.

The margin performance, at 20bps QoQ expansion, was better than the estimate, while guidance was maintained at 20-22%. We increase EPS estimate by ~1%, based on better margin performance.

Maintain Buy on Infosys with a target price of Rs 1,800, based on 22x Sep-27E EPS.

Indian Bank - Consistent performance driving robust earnings

Indian Bank reported a healthy print for Q2 FY26 on the back of robust growth (+13% YoY), stable margins and low credit costs (0.3%).

Deposit growth (+12% YoY) was healthy with CASA being stable at 37.2%. Pick-up in credit growth was driven by retail, agri and MSME segments. Credit costs remained low at 0.3% on the back of lower slippages in retail and MSME segments.

Given the granularity on both sides of the balance sheet (especially high SA mix), Indian Bank is better placed to manage its margin profile and overall asset quality.

Credit and deposit growth, which has been a laggard in the past couple of years, has witnessed an uptick in H1 FY26 and shall remain a key monitorable for the bank going forward.

We raise our FY26-FY27E estimates by ~9%/6% to factor in lower credit costs, stronger growth and better margin management. We reiterate Buy on Indian Bank with a revised target price of Rs 880 (1.2x Sep-27 ABVPS).

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