Infosys Q1 Results Review: Why Morgan Stanley Hiked Target Price — Should You Buy, Sell Or Hold?
In the wake of Infosys' first quarter earnings, Morgan Stanley maintained an 'Equal-Weight' call on the counter, but hiked target price to Rs 1,700 compared to an earlier target of Rs 1,650.
Brokerages offered mixed views on Infosys Ltd. after the IT major reported its first-quarter results for the financial year ending March 2025, describing the performance as overall “balanced” despite strong deal wins and a slight upward revision to the lower end of its FY26 revenue guidance.
The Narayana Murthy-founded company witnessed 3% growth in revenue over the previous quarter at Rs 42,279 crore, according to an exchange filing.
As far as the bottom line is concerned, the Bengaluru-based IT company saw a 2% quarter-on-quarter decline in net profit, which stood at Rs 6,921 crore — meeting analyst estimates of Rs. 6,765 crore.
More importantly, Infosys raised its lower-end revenue guidance for the ongoing fiscal and now expects revenue to grow at 1-3% change, compared to the previous forecast of 0-3%.
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Infosys Q1 Results: Key Highlights (Consolidated, QoQ)
Revenue up 3.3% to Rs 42,279.00 crore versus Rs 40,925 crore (Estimate: Rs 41,724 crore)
EBIT down 3.3% to Rs 6,921 crore versus Rs 7,033 crore (Estimate: Rs 8,714 crore)
EBIT margin contracted by 20 basis points basis points at 20.8% versus 21% (Estimate: 20.91%)
Net profit down 2% to Rs 6,921 crore versus Rs 7,033 crore (Estimate: Rs 6,765 crore)
Here's what brokerages had to say after Infosys announced their Q1 results.
Morgan Stanley On Infosys
In the wake of Infosys' first quarter earnings, Morgan Stanley maintained an "Equal-Weight" call on the counter, but hiked the target price to Rs 1,700 compared to an earlier target of Rs. 1,650.
The brokerage views Infosys' Q1 earnings as more balanced compared to its peers and expects the IT company to deliver FY26 revenue growth toward the top end of the guidance rate.
As mentioned earlier, Infosys had raised its lower end of the revenue guidance for FY26 to 1-3%. The brokerage expects Infosys to deliver above the midpoint of its guidance rate for margins.
Additionally, the brokerage expects Infosys to deliver above the midpoint of its guidance rate for margins.
Among the large cap IT companies under Morgan Stanley's coverage, Infosys is expected to deliver the strongest EBIT growth.
Macquarie On Infosys
Macquarie remained cautious on the IT giant, maintaining a "Neutral" call while lowering its target price from Rs 1,500 to Rs 1,490.
The brokerage observed a steady demand scenario, highlighting an uptick in unbilled revenue. However, it noted that EBIT was much lower than street estimates.
Macquarie further highlighted that the upper end of the revenue guidance was not increased despite the recent acquisitions.
For FY26-28, the brokerage raised its revenue guidance for Infosys to 1.8-2.2%, but lowered EBIT margin forecast by 1-15 basis points.
BofA On Infosys
BofA also released a note on Infosys in the wake of the IT giant's first quarter earnings, maintaining a "Buy" call with an unchanged target price of Rs 1,840.
The brokerage highlighted Infosys' first quarter performance as a "beat", drawing attention to the compelling combination of market share gains and improving pricing environment.
BofA believes improving pricing and market share gains could be an indicator of the company's steady positioning in the market.
Additionally, the brokerage emphasised Infosys' strong commentary on its participation in the Artificial Intelligence segment, as it continues to become a key revenue driver for the Bengaluru-based IT company.
