Infosys shares experienced a sharp decline on Friday, dropping as much as 3.72% to an intraday low of Rs 1,194.50 on the NSE, despite the company reporting quarterly results that surpassed market expectations. The stock's fall was accompanied by a 4% decrease in its American depositary receipts.
Q4 Financial Performance
For the quarter ended March 31, 2026, Infosys posted a consolidated net profit of Rs 8,501 crore, a 21% increase from Rs 7,033 crore in the same period last year. Revenue from operations rose to Rs 46,402 crore, marking a 13.4% year-on-year growth from Rs 40,925 crore. Sequentially, profit after tax climbed 28% from Rs 6,654 crore in Q3 FY26, while revenue increased 2% from Rs 45,479 crore. The operating margin remained steady at 21% year-on-year but improved by 260 basis points quarter-on-quarter.
FY27 Guidance
Infosys projected constant-currency revenue growth of 1.5% to 3.5% for FY27, while retaining its operating margin guidance at 20% to 22%. This outlook fell short of market expectations, contributing to the stock's decline.
Brokerage Views
Jefferies: Hold Rating, Target Price Rs 1,235
Jefferies reiterated its Hold rating and lowered its target price to Rs 1,235, citing limited upside. The brokerage noted that the Q4 performance was largely in line with expectations, but the FY27 revenue growth guidance disappointed. Jefferies highlighted a 3% sequential decline in headcount and a 19% year-on-year drop in net new deal wins as concerns. Net new deal wins for Q4 were $1.3 billion, down 19% year-on-year, which Jefferies described as a soft outcome.
Morgan Stanley: Equal-weight, Target Price Rs 1,380
Morgan Stanley retained its Equal-weight recommendation but reduced its target price from Rs 1,760 to Rs 1,380, implying an 11% upside. The brokerage pointed to a weaker-than-expected Q4 across several parameters and a subdued revenue outlook. It noted that organic growth is expected at around 2.5%, in line with peers. The ramp-down of a major European client and AI-driven productivity gains are likely to weigh on near-term growth. However, favorable currency movements could support earnings per share.
Motilal Oswal: Buy Rating, Target Price Rs 1,450
Motilal Oswal maintained its Buy rating with an unchanged target price of Rs 1,450, implying a 17% upside. The brokerage said the FY27 guidance of 1.5% to 3.5% constant-currency growth (or 1.25% to 3.25% organic) is below its expectations at the upper end. It highlighted increasing pressure on the existing business portfolio due to AI adoption, competition, and pricing pressure. For FY27, it built in organic growth of around 2.5%, moderating from FY26's 3.1% constant-currency growth.
HDFC Securities: Buy Rating, Target Price Rs 1,550
HDFC Securities maintained its Buy recommendation with an unchanged target price of Rs 1,550. It noted that Q4 revenue was affected by seasonal weakness and slower client decision-making. The FY27 revenue guidance fell short of expectations, underscoring persistent macroeconomic uncertainty. Demand conditions remain soft, with clients prioritizing cost optimization over large-scale transformation. HDFC Securities reduced its earnings estimates by 2% to 3% and values the stock at 18 times estimated March 2028 earnings per share.
Disclaimer: The views and recommendations expressed above are those of individual analysts or brokerages and do not represent the views of Bharat Horizon.
