Infosys Q2 Review — Strong Deal Flow Underpins Guidance Upgrade, Says Dolat Capital Maintaining 'Add'

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Dolat Capital Report

Infosys Ltd. reported revenue growth of 2.2%/2.9% QoQ/YoY in constant currency (our estimate: +1.5%/2.3%), beating our estimate. Operating profit margin expanded 20 basis points QoQ to 21.0% (our estimate: 21.3%), as currency tailwinds (+60bps) and operational gains (+30bps) were partially offset by the normalization of support costs (- 70bps) from a one-time benefit in Q1.

Growth was led by resilience in key verticals: Financial Services (+5.4% YoY CC) and Manufacturing (+6.6% YoY CC), complemented by continued outperformance in Europe (+6.3% YoY CC).

The company narrowed its FY26 rev guidance to 2-3% CC (from 1-3%), reflecting strong H1 execution and deal momentum. OPM unchanged at 20–22%.

We raise our FY26E/FY27E EPS by +1.9% to factor in the strong H1 execution, deal ramp-ups and Versent integration, leading to a revised DCF-based target price of Rs 1,720. We maintain our ‘Accumulate’ rating, valuing the stock at ~22x FY28E EPS.

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