Infosys In Focus After Guidance Raise, ADR Jumps Sharply Post Q3 Results

Infosys Share Price: Shares of technology bellwether Infosys Ltd, India’s second-largest IT services company, will be in focus on Friday, January 16, after the company announced its quarterly results after market hours on Wednesday.

Infosys’ American Depositary Receipts (ADRs) were the first to react, ending nearly 10 per cent higher on Wall Street. In the domestic market, the stock had closed 0.62 per cent higher at Rs 1,608.90 ahead of the results announcement.

The company reported constant-currency revenue growth of 0.6 per cent quarter-on-quarter, beating expectations of flat growth. Infosys also raised its FY26 constant-currency revenue growth guidance to 3–3.5 per cent from the earlier range of 2–3 per cent.

Adjusted EBIT margin stood at

21.2 per cent, broadly in line with estimates, while reported margins were at 18.4 per cent. The company also disclosed a one-time Labour Code impact of Rs 1,289 crore during the quarter.

Net profit declined 9.7 per cent year-on-year to Rs 6,654 crore from Rs 7,365 crore in the year-ago period.

Deal momentum remained strong, with total deal wins of $4.8 billion in the third quarter, of which 57 per cent were net new. This marked a sharp increase from $3.1 billion in the previous quarter, aided partly by a large contract win from NHS UK.

Infosys also reported its highest headcount in 11 quarters, adding 11,246 employees over the last two quarters.

How brokerages reacted

HSBC

HSBC, which has a Buy rating on Infosys with a price target of Rs 1,870, said the company’s Q2 performance was marginally ahead of expectations, while Q3 delivered a much stronger beat. This led to a surprise 75-basis-point upward revision to the mid-point of its FY revenue growth guidance.

The brokerage said demand commentary improved, especially in banking and energy verticals, and added that greater clarity on AI impact and improving US corporate sentiment are supporting IT demand.

CLSA

CLSA has an Outperform rating with a target price of Rs 1,779. It said the revenue surprise was driven mainly by the ramp-up of the NHS contract and sustained discretionary spending in the BFSI segment.

CLSA also highlighted management’s confidence in demand acceleration across BFSI and energy and utilities in FY27, supported by AI-led projects.

The brokerage raised its constant-currency revenue growth forecasts for FY26 and FY27 to 3.4 per cent and 6.3 per cent from 3.1 per cent and 6 per cent, respectively, citing better exit rates and improved demand visibility.

Jefferies

Jefferies maintained its Buy rating with a price target of Rs 1,880. It said the higher growth guidance appears to be driven by Q3 outperformance rather than expectations of a stronger Q4, although management commentary remained upbeat.

Jefferies raised its estimates by up to 1 per cent and expects Infosys to deliver a 7.5 per cent recurring EPS CAGR over FY26–28.

Nuvama

Nuvama reiterated its Buy rating and raised its target price to Rs 1,900. The brokerage said Infosys has delivered two consecutive quarters of strong deal wins and growth, providing high visibility for upcoming quarters.

It added that FY27 growth will now depend on how the March quarter shapes up, with potential for a better exit rate compared with the past two years.

Out of 51 analysts tracking Infosys, 36 have a Buy rating, 13 recommend Hold, and two have a Sell call on the stock.