Infosys Shares Rally Sharply on Revised Growth Forecast
Infosys stock witnessed a strong upward movement on Friday. The share price climbed more than 5% on both major Indian exchanges. This surge followed the company's decision to upgrade its revenue growth guidance for the financial year 2026.
Stock Performance and Q3 Financials
By late morning trading, Infosys shares were trading significantly higher. On the Bombay Stock Exchange, the stock rose 5.04%, gaining 80 points to reach 1,679.65. Similarly, on the National Stock Exchange, it advanced 5.05%, also adding 80 points to trade at 1,680.60.
The company released its third-quarter results alongside the guidance update. Consolidated net profit for Q3 showed a 2% year-on-year decline, standing at Rs 6,654 crore compared to Rs 6,806 crore in the same period last year. However, revenue from operations demonstrated growth, increasing 9% year-on-year to Rs 45,479 crore.
Infosys also saw positive movement in its American Depository Receipts. ADRs hit an intraday peak of $19.45 before settling at $19.35, marking a 10.4% increase from Thursday's close of $18.82. Over the past two trading sessions, ADRs have surged more than 7%.
Brokerage Reactions and Analysis
Financial analysts and brokerages responded constructively to Infosys's guidance revision, though assessments of near-term performance varied.
Nomura maintained its Buy recommendation on the stock. The brokerage set a target price of Rs 1,810, citing the company's decision to raise its FY26 constant-currency revenue growth guidance from 2-3% to 3-3.5%.
Elara Capital retained its 'Accumulate' rating while increasing the target price to Rs 1,770. The brokerage noted that Q3 revenue exceeded expectations, partly aided by the NHS deal, and margins performed better than anticipated. Elara highlighted strong performance in the first nine months of FY26 and healthy deal wins as factors behind the guidance upgrade.
Elara added that to achieve the revised outlook, fourth-quarter growth would need to range between -1.7% and +0.2%, which it considers achievable. The brokerage also pointed to early signs of recovery in discretionary spending within the Banking, Financial Services, and Insurance segment.
Emkay Global also maintained its Buy rating, setting a target price of Rs 1,750. It described the third-quarter performance as mixed. Revenue exceeded estimates with 0.6% sequential growth in constant-currency terms, but adjusted EBIT margin declined 20 basis points quarter-on-quarter to 20.8%.
Emkay noted that the revised guidance does not incorporate potential revenue from the pending Telstra joint venture. This reflects caution at the lower end due to macroeconomic uncertainty, while a more optimistic scenario is embedded in the upper end of the range. The brokerage adjusted its earnings estimates for FY26 to FY28 by -2.1% to +0.5% to reflect the Q3 outcomes.
The company maintained its operating margin outlook for FY26 at 20-22%, providing stability alongside the upgraded revenue growth projection.
