Despite the strong Q1, Infosys continues to see a wait-and-watch posture among clients, with no material improvement in discretionary budgets or decision cycles. Tariff uncertainties and geopolitical tensions continue to weigh on sentiment. Management stated that the macro environment remains unchanged vs Q4, which was a key reason for the cautious stance on guidance.
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Motilal Oswal Report
Despite an upgrade to the lower end of the guidance, management remained cautious of discretionary spending and no material improvement from clients. Infosys Ltd.'s work in Enterprise AI has been promising, but near-term catalysts remain limited.
Our estimates are unchanged. We value Infosys at 24x FY27E EPS. This yields a rounded target price of Rs 1,750, implying an 11% potential upside. We reiterate our Neutral rating on the stock.
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