IT bellwether Infosys Ltd. bagged multiple target hikes from analysts after raising their revenue guidance for a third consecutive time following an in-line third-quarter profit growth.

The technology giant upped its revenue forecast in constant-currency terms for the financial year ending March 2025 to 4.5–5.0% from its earlier projection of 3.75–4.5%.

The guidance upgrade signifies improving macro and business fundamentals. Infosys will benefit disproportionately in fiscal 2026-27 from a revival in discretionary spends, Nuvama Institutional Equities said in a note. “We view the stock as one of the best ways to play the revival in the IT sector over the next few years.”

Nuvama retained its ‘buy’ rating and upgraded its target to Rs 2,350 per share from Rs 2,250 apiece earlier. This implies an upside potential of 21.8% from its Thursday’s close.

The company recorded a revenue rise of 2% over the previous three months to Rs 41,764 crore in the quarter ended Dec. 31, 2024. The margin guidance for the fiscal was retained at 20–22%. Revenue growth in constant-currency terms rose 6.1% on a year-on-year basis and 1.7% sequentially.

Nomura Global Markets Research also believes that Infosys is one of the best ways to play a potential improvement in discretionary demand in IT services. “Strong deal pipeline and improving discretionary demand across multiple verticals is positive.”

The brokerage retained ‘buy’ and raised its target to Rs 2,220 per share against Rs 2,190 apiece earlier. However, slower-than-expected growth and weaker-than-expected margins could be key downsides to watch.

Investec maintained its ‘sell’ while hiking the Infosys target to Rs 1,773 per share from Rs 1,700 apiece earlier, citing improved revenue growth guidance. Operationally the tech giant reported strong headline revenue, but internals appear weak, it said.

Meanwhile, Citi Research expects a “gradual and uneven” recovery. Citi maintained its ‘sell’ call and cut the target price to Rs 2,000 apiece from 2,035 per share earlier. Forward-looking indicators are weak for almost every company in the sector, it said, maintaining their “cautious” view on Indian IT services.

‘Too Lazy’ In Execution

The opportunity is immense with artificial intelligence, but the execution is poor, and the narrative is completely off track, according to Trip Chowdhry, managing director of Global Equities Research. “Customers want someone to handhold them into the AI era. Infosys needs thought leadership and better execution.”

Chowdhry criticised their approach, adding: “You can’t mix digitization with AI—they require separate strategies.”

The industry vacuum is being filled by IBM and Accenture, he said. “Infosys needs to step up.”

On growth, Chowdhry said: “With a trillion-dollar opportunity in AI, why are their growth rates so lax?… The narrative is just boring.”

Infosys has to take them up and go head-on to capture this opportunity, Chowdhry said. “They are too lazy and poor in execution.”

Nomura

  • Maintains ‘buy’ rating, raises target price to Rs 2,220 per share (from Rs 2,190).

  • Reports an all-around beat in third quarter.

  • Lifts guidance for FY25E again.

  • Notes Project Maximus’ positive impact on margins continues.

  • Adjusts FY25-27F earnings per share estimates by 1%, reiterating as a top pick in large-cap India IT services.

Investec

  • Maintains ‘sell’ rating, raises target price to Rs 1,773 (from Rs 1,700).

  • Reports operationally strong revenue, though internals appear weak.

  • Notes a 20-basis-point revenue boost from the Intech acquisition in the quarter.

  • Revised growth guidance implies a 0.2-2% sequential revenue decline in fourth quarter.

  • Decline due to fewer working days and lower third-party revenue.

Bernstein

  • Maintains ‘outperform’ rating with a target price of Rs 2,330, implying 21% upside.

  • Names Infosys as a top pick in IT services.

  • Reports another all-around beat on revenue, margins, and earnings.

  • Raises FY25 revenue growth guidance by 60 bps to 4.5-5% YoY constant currency.

  • Notes healthy deal momentum with $ 2.5 billion in total contract value.

  • Sees an ongoing “up-cycle” in large-cap IT services.

. Read more on Earnings by NDTV Profit.The company recorded a revenue rise of 2% over the previous three months to Rs 41,764 crore in the quarter ended Dec. 31, 2024.  Read MoreQuarterly Earnings, Business, Markets, Notifications 

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