Motilal Oswal Maintains Buy Rating on Infosys, Targets Rs 1450

Infosys Posts Mixed Q4 Earnings, Maintains FY27 Guidance

Infosys (INFO) released its fourth-quarter fiscal year 2026 results, reporting revenue of USD 5 billion, a decline of 1.2% quarter-over-quarter (QoQ). In constant currency, the revenue dropped by 1.3% QoQ, falling short of Motilal Oswal's estimate of a 0.7% QoQ decline.

The company's adjusted earnings before interest and taxes (EBIT) margin stood at 21%, below the research firm's estimate of 21.2%. However, the adjusted EBIT rose 16.6% QoQ and 13.6% year-over-year (YoY) to INR 97 billion, exceeding Motilal Oswal's estimate of INR 98 billion. Adjusted profit after tax (PAT) came in at INR 88 billion, a 15.4% increase QoQ and a 21% rise YoY, surpassing the research firm's estimate of INR 73 billion.

Infosys Maintains FY27 Guidance

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Despite the mixed Q4 results, Infosys has maintained its guidance for fiscal year 2027, predicting a 1.5-3.5% YoY constant currency growth rate. The company has also kept its adjusted EBIT margin guidance in the 20-22% range. Large deal total contract value (TCV) stood at USD 3.2 billion, a decline of 33.3% QoQ. The book-to-bill ratio was 0.6.

Outlook and Valuation

While execution on deal conversion and pricing remains a key monitorable, Infosys' positioning across AI-led transformation and cost optimization programs is expected to support gradual improvement over the medium term. Motilal Oswal values Infosys at 17x fiscal year 2028 estimated earnings per share (EPS) with a target price of INR 1,450, implying a potential upside of ~17%. The research firm reiterates its BUY rating for the company.

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