Infosys Q3 results: ADR up 10%; share price targets post FY26 guidance revision
Nuvama said Infosys has now delivered two consecutive quarters of solid deal-wins and growth, which provide high growth visibility for coming quarters.
- Jan 15, 2026,
- Updated Jan 15, 2026 9:47 AM IST
Infosys Ltd reported a strong set of third quarter results that triggered over 10 per cent rally in its American Depository Receipts (ADRs) in overnight trade. Analysts said early signals of discretionary demand are visible in its guidance upgrade and commentary. They retained their 'Buy' call on the IT major.
Shubham Rathore, Principal Analyst at Gartner said Infosys’s Q3 results met expectations, delivering $5.1 billion in revenue, a stable operating margin of 18.4 per cent, and impressive large deal wins of $4.8 billion. Key takeaways, he said, included the company’s continued focus on AI and digital transformation, robust free cash flow, and a strong pipeline of new business.
"Gartner’s latest outlook shows enterprise IT and AI spending accelerating, with infrastructure and software integration at the forefront. Infosys’s strategic investments in AI platforms, talent, and client partnerships position it well to deliver sustained value and help clients achieve their transformation goals in a rapidly changing market,” Rathore said.
Nuvama said Infosys has now delivered two consecutive quarters of solid deal-wins and growth, which provide high growth visibility for coming quarters. "FY27 growth will now depend on how Q4 turns out to be – hopefully leaving the company with a better exit-rate than last two years. We maintain FY26E/27E EPS and roll forward valuation to 23x FY28 PE. Retain 'BUY' with a target price of Rs 1,900 (earlier Rs 1,800)," it said.
Infosys' revenue grew 0.6 per cent in constant currency (CC) terms sequentially, beating Street’s estimate of 0.3 per cent CC QoQ. Adjusted EBIT margin at 21.2 per cent, yo 20 bps QoQ was in line with estimates. The management upgraded FY26 revenue growth guidance to 3-3.5 per cent from 2-3 per cent. TCV too was strong at $4.8 billion, Nuvama said.
MOFSL said a potential loss of business from Daimler could present a 1.5 per cent revenue headwind over FY27-28E. The management, it said, has indicated that the contract remains in place until December 2026. It assumed a ramp-down after that.
"We slightly raise our FY26/27/28 EPS estimates by 2.2 per cent/1.8 per cent/1.2 per cent. Infosys is well-placed to benefit from enterprise-wide AI spending, given its discretionary-heavy mix. At the current valuations, upside risks meaningfully outweigh downside risks. We value Infosys at 26 times FY28E EPS with a target price of Rs 2,200, implying a 37 per cent upside potential. Reiterate BUY rating," MOFSL said.
In overnight trade, Infosys ADRs jumped 10.45 per cent to $19.35 on NYSE. Stock market are closed today on account of MCGM Election day.
Infosys Ltd reported a strong set of third quarter results that triggered over 10 per cent rally in its American Depository Receipts (ADRs) in overnight trade. Analysts said early signals of discretionary demand are visible in its guidance upgrade and commentary. They retained their 'Buy' call on the IT major.
Shubham Rathore, Principal Analyst at Gartner said Infosys’s Q3 results met expectations, delivering $5.1 billion in revenue, a stable operating margin of 18.4 per cent, and impressive large deal wins of $4.8 billion. Key takeaways, he said, included the company’s continued focus on AI and digital transformation, robust free cash flow, and a strong pipeline of new business.
"Gartner’s latest outlook shows enterprise IT and AI spending accelerating, with infrastructure and software integration at the forefront. Infosys’s strategic investments in AI platforms, talent, and client partnerships position it well to deliver sustained value and help clients achieve their transformation goals in a rapidly changing market,” Rathore said.
Nuvama said Infosys has now delivered two consecutive quarters of solid deal-wins and growth, which provide high growth visibility for coming quarters. "FY27 growth will now depend on how Q4 turns out to be – hopefully leaving the company with a better exit-rate than last two years. We maintain FY26E/27E EPS and roll forward valuation to 23x FY28 PE. Retain 'BUY' with a target price of Rs 1,900 (earlier Rs 1,800)," it said.
Infosys' revenue grew 0.6 per cent in constant currency (CC) terms sequentially, beating Street’s estimate of 0.3 per cent CC QoQ. Adjusted EBIT margin at 21.2 per cent, yo 20 bps QoQ was in line with estimates. The management upgraded FY26 revenue growth guidance to 3-3.5 per cent from 2-3 per cent. TCV too was strong at $4.8 billion, Nuvama said.
MOFSL said a potential loss of business from Daimler could present a 1.5 per cent revenue headwind over FY27-28E. The management, it said, has indicated that the contract remains in place until December 2026. It assumed a ramp-down after that.
"We slightly raise our FY26/27/28 EPS estimates by 2.2 per cent/1.8 per cent/1.2 per cent. Infosys is well-placed to benefit from enterprise-wide AI spending, given its discretionary-heavy mix. At the current valuations, upside risks meaningfully outweigh downside risks. We value Infosys at 26 times FY28E EPS with a target price of Rs 2,200, implying a 37 per cent upside potential. Reiterate BUY rating," MOFSL said.
In overnight trade, Infosys ADRs jumped 10.45 per cent to $19.35 on NYSE. Stock market are closed today on account of MCGM Election day.