Infosys Q2 Review — Motilal Oswal Maintains 'Neutral' Rating Citing Continued Macro Uncertainty

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Motilal Oswal Report

Infosys Ltd. reported Q2 FY26 revenue of $5.0 billion, up 2.2% QoQ in constant currency/ 2.9% YoY in CC vs our estimate of 2.4% QoQ in CC. Ebit margin stood at 21.0% vs our estimate of 21.2%. Ebit increased 6% QoQ/8% YoY to Rs 93.5 billion (estimate: Rs 94 billion). PAT came in at Rs 74 billion, up 6.4% QoQ/13.2% YoY, above our estimate of Rs 72 billion.

Management upgraded the lower end of its FY26 CC revenue growth guidance from 1% to 2%, now expecting growth in the 2-3% range. Large deal TCV stood at $3.1 billion, down 18.4% QoQ.

The book-to-bill ratio was 0.6x. Net new TCV was down 34% QoQ. For H1 FY26, revenue/Ebit/PAT grew 8%/7%/11% YoY in INR terms.

We expect Infosys’ revenue/Ebit/PAT to grow 8%/8%/6% YoY in H2 FY26. We reiterate our Neutral rating on Infosys with a target price of Rs 1,650, implying a 12% potential upside.

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