In early trading, Infosys shares experienced a notable uptick, climbing by 2% despite the company’s cautious revenue outlook for FY26. This mixed guidance has not deterred several prominent brokerage firms, as many analysts continue to maintain a Buy rating on the tech giant, with target prices ranging from Rs 1,525 to Rs 1,800. Let’s delve into the reasons behind this sustained optimism in the face of uncertainty.

Brokerages Remain Positive on Infosys

Despite a weaker-than-expected revenue forecast, brokerages are optimistic about Infosys, showcasing resilience in the Information Technology sector.

• Nomura: Upholds Buy with a target of Rs 1,720
• Nuvama: Retains Buy with a target of Rs 1,700
• HSBC: Maintains Buy with a target of Rs 1,700
• Jefferies: Holds Buy, target revised to Rs 1,660
• Bernstein: Continues Outperform, target set at Rs 1,680
• JP Morgan: Keeps Overweight rating with a target of Rs 1,800

Nomura’s Insights on Infosys

Nomura has reaffirmed its Buy rating, adjusting the target price to Rs 1,720 from an earlier Rs 1,950. Their recent report highlights that Infosys’s Q4FY25 results were a “mixed bag,” with a 3.5% decline in revenues in constant currency terms, attributed largely to lower third-party pass-through items. Despite this, the EBIT margin of 21% slightly exceeded expectations.

The brokerage acknowledged that two-thirds of this revenue drop stemmed from reduced pass-throughs, indicating a need to adapt to changing market conditions. They remain confident, pointing to a strong deal pipeline and opportunities for modernization in areas like ERP and infrastructure.

Nuvama’s Perspective

Nuvama also stands firm with a Buy rating, setting a revised target price of Rs 1,700. They noted that the revenue miss was anticipated and not entirely surprising given the current economic landscape. With an EBIT margin of 21% for Q4 exceeding expectations, Nuvama emphasized the management’s confidence during these challenging times. The firm highlighted a total contract value (TCV) of $2.6 billion, marking a 4.2% increase quarter-over-quarter, which adds to the attractiveness of Infosys shares.

HSBC’s Cautious Optimism

HSBC retained its Buy rating with a target price of Rs 1,700. They expressed concern over the sharp revenue miss in Q4 but described the FY26 guidance as “optimistic” given the current macroeconomic uncertainties. They emphasized that the upcoming quarter’s performance will be crucial in restoring investor confidence.

Jefferies and Bernstein Weigh In

Jefferies has maintained a Buy recommendation but adjusted its target to Rs 1,660. They highlighted the 3.5% decline in constant currency revenue as a significant disappointment but believe that Infosys can achieve a 9% EPS CAGR between FY25 and FY27, which supports their upbeat outlook.

Meanwhile, Bernstein continues to view Infosys positively, keeping an Outperform rating with a target of Rs 1,680. They noted that the revised growth guidance for FY26 of 0-3% fell short of market expectations, yet the company’s commitment to maintaining its margin guidance indicates effective cost management.

JP Morgan’s Bullish Stance

JP Morgan is among the most optimistic, maintaining an Overweight rating with a target price of Rs 1,800. They pointed out that while revenue figures fell short, margins and earnings per share surpassed expectations. The firm interprets the 0-3% growth forecast as “better than feared,” particularly in light of recent challenges faced by competitors like Wipro.

In summary, despite a cautious revenue outlook for FY26, the overall sentiment towards Infosys remains positive among major brokerages, highlighting the company’s potential for growth and resilience in a fluctuating market. As investors look forward to upcoming earnings reports and performance metrics, Infosys continues to attract attention as a viable investment opportunity.