Infosys Stock Takes Cautious Turn as Brokerages Flag Weak Guidance Amid Q4 Earnings Beat
Infosys Stock Outlook Turns Cautious After Q4 FY26 Results
Infosys Ltd's stock performance has taken a hit after the company's Q4 FY26 results were announced, with brokerages expressing concerns about weak near-term growth visibility despite a profit beat. Shares of Infosys had fallen 2.9 percent to close at Rs 1,231.8 on the day before the results announcement, while its ADR declined 4.01 percent overnight following the earnings release.
Profit Beats Expectations but Revenue Growth Remains Modest Infosys reported a strong Q4 on the bottom line, with net profit rising 27.8 percent quarter-on-quarter to Rs 8,501 crore, supported by margin expansion and lower tax outgo. However, revenue growth remained modest at 2 percent sequentially. The company's FY27 guidance pointed to a softer demand environment, with revenue growth expected to be in the range of 1.5 percent to 3.5 percent in constant currency.
| Brokerage | Q4 FY26 Guidance | FY27 Guidance |
|---|---|---|
| Infosys | - | 1.5-3.5% (constant currency) |
| Citi | - | 1.5-3.5% (constant currency) |
| Jefferies | - | 1.5-3.5% (constant currency) |
| Motilal Oswal Financial Services | - | 1.5-3.5% (constant currency) |
| Nomura | - | 3.4% (dollar terms) |
| HSBC | - | 1.5-3.5% (constant currency) |
Brokerages Remain Divided on Infosys Outlook Brokerages remain divided on Infosys' outlook, with some cautioning about weak near-term growth visibility and others expecting a gradual recovery supported by deal wins, vertical-specific strength, and AI-led opportunities. Citi retained a 'neutral' call on Infosys stock and cut its target price to Rs 1,300 per share, citing a weak Q4 performance with misses on revenue and EBIT margin. Jefferies maintained a 'hold' rating with a target price of Rs 1,235, while Motilal Oswal Financial Services flagged a tough outlook, maintaining a 'buy' rating with a target price of Rs 1,425.
On the other hand, some brokerages remained constructive on the medium-term outlook. Nomura reiterated a 'buy' rating with a target price of Rs 1,640 on Infosys shares, implying an upside of over 33 percent. HSBC also maintained a 'buy' call with a target price of Rs 1,585.
Stock Performance Infosys stock has declined 16.3 percent over the past one year, underperforming the Nifty 50, which is down 0.3 percent during the same period. The company's market capitalisation stands at around Rs 5.15 lakh crore.
Investor Takeaway
Investors should be cautious about Infosys' near-term growth prospects due to weak guidance.
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