Infosys up 5% as strong deal wins, guidance hike keep analysts optimistic
Infosys company reported a 2.2 per cent decline in net profit to about ₹6,654 crore in Q3FY26, from ₹6,806 crore a year ago
 "Infosys up 5% as strong deal wins, guidance hike keep analysts optimistic")
Infosys Q3 results review: Infosys reported its Q3FY26 results after market hours on Wednesday. The information technology (IT) major reported mixed December quarter (Q3FY26) results, according to analysts. On Wednesday, the Infosys American Depository Receipts (ADR) zoomed over 10 per cent, and added another 0.4 per cent last night. At 9:40 AM, Infosys share price was trading 4.65 per cent higher at ₹1,673.45 per share on BSE. In comparison, BSE Sensex was up 0.25 per cent at 83,587.68. In the intra-day trade the stock climbed 5.2 per cent to the day's high at ₹1,682.25 per share.
Infosys Q3 results highlights:
- The company reported a 2.2 per cent decline in net profit to about ₹6,654 crore in Q3FY26 due to the impact of the new Labour Codes, as compared to ₹6,806 crore a year ago. In Q2FY26, the company posted a net profit of ₹7,364 crore.
- Revenue rose 8.9 per cent year-on-year (Y-o-Y) to ₹45,479 crore, as compared to ₹41,764 crore a year ago and ₹44,490 crore in Q2FY26.
- On a constant currency (CC) basis, which discounts the impact of currency fluctuations, the company grew 1.7 per cent.
- The company reported a total contract value (TCV) of $4.8 billion during the quarter, of which 57 per cent was net new. TCV was up 45 per cent sequentially from $3.3 billion in the previous quarter.
- Infosys raised FY26 revenue growth guidance to 3–3.5 per cent CC from 2–3 per cent. Management expects growth acceleration in banking, financial services and insurance (BFSI) and EURS in FY27, supported by deal wins and AI partnerships.
Brokerages’ view on Infosys post Q3 Results
Nomura | Buy | Target: ₹1,810
Nomura noted Infosys posted $5,099 million revenue (0.6 per cent quarter-on-quarter (Q-o-Q); 1.7 per cent Y-o-Y in constant currency), marginally above consensus. Adjusted Earnings before interest and tax (Ebit) margin came in at 21.2 per cent, up 20 basis points (bps) Q-o-Q—a modest miss as compared to consensus. Large deal wins were $4.85 billion ( up 94 per cent Y-o-Y) with 57 per cent net new wins, which Nomura highlighted as a key positive.
Nomura expects Ebit margins to remain stable around 21 per cent for FY26, within the company’s 20–22 per cent band, with Project Maximus and currency tailwinds offset by furlough and variable pay impacts.
Further, the brokerage expects Infosys to post 4.7 per cent Y-o-Y USD revenue growth in FY26F, including 65 basis points (bps) from acquisitions and does not include the Versent deal.
Emkay Global Financial Services | Buy | Target: ₹1,750
Analysts believe Infosys delivered a mixed operating performance in Q3, with a beat on revenue estimates, albeit a margin that missed expectations. Revenue grew 0.6 per cent CC Q-o-Q. Adjusted Ebit margin declined 20 bps Q-o-Q to 20.8 per cent, missing the brokerage’s estimate.
On the guidance front, Emkay said it did not include any revenue from the Telstra joint venture (JV) pending closure, and reflected elevated uncertainty at the lower end, albeit a better macro scenario at the upper end.
“We tweak FY26-28E earnings per share (EPS) by -2.1 per cent to 0.5 per cent, factoring in the Q3 performance,” the brokerage said.
Motilal Oswal Financial Services | Buy | Target raised to ₹2,200 from ₹2,150
The brokerage noted that the "ask rate" for the top end of the guidance in Q4FY26 is now flat, compared to an earlier expectation of a 1 per cent decline. Large deal TCV was strong at $4.8 billion, up 55 per cent Q-o-Q, with a book-to-bill ratio of 0.9x.
For the full year, Motilal Oswal expects Infosys to maintain its growth trajectory. It maintains Infosys as its top pick among Tier-1 IT companies with a target price of ₹2,200, implying a 37 per cent upside potential based on 26x FY28E EPS.
PL Capital | Buy | Target raised to ₹1,900 from ₹1,780
PL Capital said Infosys’ Q3 revenue growth was better than it expected, with constant-currency (CC) QoQ growth of 0.6 per cent versus its estimate of -0.5 per cent, helped by the ramp-up of the NHS deal and an uptick in discretionary spending. It added that momentum in key verticals held up despite seasonality, with rising client interest in embedding AI into business functions also supporting topline.
On margins, the brokerage remains cautious due to higher investment intensity in sales and marketing, hiring/re-skilling for artificial intelligence (AI), and incremental costs related to the Labour Code, partly offset by Project Maximus. It factors in CC revenue growth of 3.2 per cent / 6 per cent / 6.8 per cent Y-o-Y for FY26E/FY27E/FY28E and margin change of flat/ 30 bps/40 bps Y-o-Y, respectively.
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