Shares of Infosys Ltd. will be in focus heading into trade on Friday after a slew of brokerages came out with positive notes, in the wake of the IT giant's third-quarter earnings for the financial year ending March 2026. The likes of Morgan Stanley, BofA, Citi and Jefferies have all hiked target prices on the counter, citing earnings beat.
Infosys came out with its Q3 earnings on Wednesday, reporting a fall in net profit in the third quarter of the current financial year due to higher costs on labour.
Consolidated net profit fell nearly 10% to Rs 6,654 crore in the October-December quarter, compared to the preceding quarter, according to a stock exchange filing on Wednesday. The company had to provision Rs 1,289 crore as a one-time cost to comply with new labour codes notified by the government late last year.
Infosys Q3 Result Highlights (Consolidated, QoQ)
Revenue up 2.2% at Rs 45,479 crore versus Rs 44,490 crore (Bloomberg estimate: Rs 45,204 crore)
EBIT up 1.3% at Rs 9,479 crore versus Rs 9,353 crore (Bloomberg estimate: Rs 9,558 crore)
EBIT margin at 20.8 % versus 21.02% (Bloomberg estimate: 21.14%)
Profit down 9.6% at Rs 6,654 crore versus Rs 7,364 crore (Bloomberg estimate: Rs 7,397 crore)
Brokerages On Infosys
Morgan Stanley on Infosys
Morgan Stanley maintains an Equal-weight rating and raises the target price to Rs 1,760 from Rs 1,640.
The brokerage flags a good quality earnings beat in Q3.
Management commentary points to improved discretionary spending in select verticals.
The midpoint of FY26 revenue guidance implies the strongest fourth quarter in the last four years.
The guidance upgrade reflects greater confidence in exiting Q4 on a stronger footing.
Strong net headcount addition alongside lower utilisation QoQ signals improved visibility.
Morgan Stanley raises FY27 revenue growth estimate to 5.4% from 4%.
Organic growth is expected to accelerate by around 200 bps in FY27.
Infosys' valuation discount to HCL Tech of about 7% could narrow.
Jefferies on Infosys
Jefferies maintains a Buy rating and raises the target price to Rs 1,880 from Rs 1,860.
The brokerage highlights strong execution and a steady outlook.
The higher growth guidance largely reflects the Q3 beat rather than a materially stronger Q4.
Revenue growth was broad-based, led by Europe with 3.6% QoQ growth.
Life sciences drove growth due to an earlier-than-expected ramp-up of the NHS mega deal.
Financial services and energy & utilities are expected to see faster growth in FY27.
Guidance implies a QoQ constant currency decline of 1.8% at the lower end and growth of 0.1% at the upper end.
Margins were aided by one-time gains of about 0.4% from a property sale.
Jefferies expects Infosys to deliver around 3% and 5% constant currency revenue growth in FY26 and FY27, respectively.
Citi on Infosys
Citi maintains a Neutral rating and raises the target price to Rs 1,700 from Rs 1,680.
Q3 performance and deal TCV trends were decent.
North America growth remained muted year-on-year and needs to improve.
Citi expects a slow and uneven recovery in sector-wide growth in FY27.
Growth in Q3 was largely driven by healthcare, led by the NHS deal.
Margins benefited from a one-off gain of around $18 million.
Infosys and HCL Tech remain Citi's preferred large-cap IT names within coverage.
BofA on Infosys
BofA reiterates a Buy rating and raises the target price to Rs 1,840 from Rs 1,780.
Management commentary was more definitive on discretionary spending recovery in pockets.
Outlook for financial services and energy & utilities has strengthened.
A large part of revenue growth this year has come from higher realisations.
The company identified six AI-led opportunity areas.
Margins are expected to remain broadly stable.
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