Buy Infosys shares, say JM Financial, Axis Securities; IT stock down 2% after Q2 results

Infosys shares fell as much as 2.2 per cent to touch a day’s low of Rs 1,440 on BSE against its previous close of Rs 1,472.75 in Friday’s trade. The decline in the IT major's stock came a day after it announced its September quarter results. Despite the drop, brokerages JM Financial and Axis Securities have maintained a 'Buy' rating on the stock, seeing a potential upside of up to 24 per cent.

For the second quarter of FY26, Infosys reported a consolidated revenue of Rs 44,490 crore, marking a 5.2 per cent sequential rise and an 8.6 per cent increase year-on-year. The company's net profit stood at Rs 7,364 crore. In constant currency terms, revenue grew 2.2 per cent quarter-on-quarter. Following the results, Infosys revised its FY26 revenue growth guidance upwards, narrowing it from 1-3 per cent to 2-3 per cent in constant currency. The EBIT margin guidance was retained at 20-22 per cent.

Brokerage firm JM Financial has reiterated its ‘Buy’ recommendation for Infosys and raised its 12-month target price from Rs 1,740 to Rs 1,800 per share. This new target implies a potential upside of over 24 per cent from Friday's price of around Rs 1,444.

JM Financial believes Infosys' outlook for the second half of the year is conservative and sees scope for a guidance upgrade. Analysts at JM Financial noted that strong deal wins of $3.1 billion, a 100 per cent net new mega-deal worth $1.6 billion from NHS secured in October, and significant headcount additions point towards improved demand visibility. "At 19x FY27E PER, we find risk-reward favourable," it said. The brokerage has built in a 3.7 per cent constant currency growth for FY26 for the IT giant.

Axis Securities has also maintained a ‘Buy’ rating on the stock, citing a stable environment and steady growth prospects. The brokerage has set a target price of Rs 1,620 per share, implying an upside of over 12 per cent from the current market price.

The firm highlighted Infosys' strong large deal win of $3.1 billion in Q2, with 67 per cent being net new contracts, as a key positive. Axis Securities believes the company is well-positioned to benefit from vendor consolidation, supported by its delivery capabilities and innovations in Artificial Intelligence, including its Infosys Topaz platform. While acknowledging that macro headwinds and client caution on discretionary spending persist, the brokerage expects the company's performance stability to be sustained. The valuation is based on a 21x P/E multiple of its FY27 earnings estimate.