Infosys Q4 Results Review: IDBI Capital Revises Rating To 'Hold', Cuts Target Price

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

IDBI Capital Report

Infosys Ltd. reported a 4.2% QoQ topline decline in constant currency to $4,730 million, primarily driven by a reduction in third-party contributions and seasonal softness. Management signaled a further decline in third-party revenue in FY26 versus FY25, while persistent macroeconomic headwinds and protracted client decision cycles are expected to constrain organic revenue growth to 0–3% in FY26, excluding acquisitions.

Notably, the company maintained a robust deal pipeline of $2.6 billion (+4% QoQ), with 63% net new total contract value and no significant delays in deal conversions, offering a degree of resilience. The absence of major rampdowns further provides near-term cushion to growth. Consequently, we forecast CC revenue growth of 4% in FY26 and 7% in FY27, with Ebit margins maintained within the guided 21–22% range. Recent strategic acquisitions—MRE Consulting (energy vertical) and Missing Link (cybersecurity)—underscore Infosys' focus on capability augmentation.

While we retain a long-term constructive stance, we revise our rating to Hold and reduce the target price to Rs 1,500 (20x FY27E EPS) from Rs. 2,052, reflecting prevailing challenges in terms of tariff, geopolitical uncertainties, and trade barriers.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.