Infosys shares: Brokerages see up to 19% upside on strong AI-led deal momentum

Shares of Infosys Ltd attracted positive commentary from select domestic brokerages after the IT major reported a resilient December quarter (Q3 FY26) performance, driven by robust large-deal wins and an improving growth outlook. The stock settled 0.07 per cent higher at Rs 1,599.05 on Wednesday.

Choice Institutional Equities highlighted the company's strong execution despite seasonal headwinds, pointing to large-deal momentum with total contract value (TCV) of $4.8 billion from 26 deals. The brokerage said Infosys is sharpening its focus on six AI value pools, which position it well to gain market share across AI-led services and solutions.

"Infosys delivered a resilient Q3 despite seasonality, supported by strong large-deal momentum with $4.8 billion TCV from 26 deals, The company is focusing on six Al value pools-including Al engineering, data for Al, Al agents for operations, Al-led software development and legacy modernization, Al with physical devices, and Al services where it is well positioned to gain market share and emerge as a leading Al value-creator. Infosys expects stronger growth in FY27, led by the Energy & Utilities vertical and a pickup in discretionary spending in BFSI," Choice stated.

"Given the strong large deal momentum and positive outlook, we have revised our estimates. Thus, we expect Revenue, EBIT and PAT to expand at a CAGR of 10.2 per cent, 11.8 per cent and 10.8 per cent, respectively, over FY25-FY28E and maintain our BUY rating with a revised target price of Rs 1,865 implying a 22x multiple on the average of FY27E and FY28E EPS of Rs 84.8,"

Nuvama Institutional Equities has also maintained a positive stance, citing better-than-expected revenue growth, margin stability and an upgrade in FY26 revenue guidance. The brokerage noted that consecutive quarters of strong deal wins have improved growth visibility for the coming quarters.

Nuvama Institutional Equities said, "Infosys posted solid Q3 FY26 results. Revenue grew +0.6 per cent CC QoQ (+1.7 per cent CC YoY), beating our/Street's estimate of +0.4 per cent/0.3 per cent CC QoQ. Adjusted EBIT margin was 21.2 per cent, +20bp QoQ in line with our estimate. Management upgraded FY26 revenue growth guidance to 3.0–3.5 per cent (from 2–3 per cent). TCV too was strong at $4.8 billion (+57 per cent QoQ/92 per cent YoY). Infosys has 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 TP of Rs 1,900 (earlier Rs 1,800)."

At current levels, the target prices suggested by the brokerages imply an upside potential of up to about 19 per cent from Wednesday's closing price.