Update shared on03 Oct 2025
Fair value Decreased 1.59%Analysts have increased their price target for Infosys from $18 to $19, citing stronger-than-expected Q1 results and improved guidance as justification for the upgrade.
Analyst Commentary
Recent updates from market analysts highlight a mix of optimism and caution regarding Infosys's business outlook and valuation trajectory.
Bullish Takeaways- Bullish analysts point to the stronger-than-expected Q1 performance as a sign of operational resilience and effective execution.
- The upward revision of company guidance, particularly the raised lower end, signals increased confidence in the business’s near-term revenue visibility despite broader market challenges.
- Valuation support comes from the company's ability to mitigate anticipated declines in third-party revenue while maintaining overall growth momentum.
- Improved operating leverage is expected to bolster margins and enhance the company’s attractiveness relative to peers.
- Some cautious analysts maintain a neutral stance and highlight ongoing concerns around a projected decline in third-party revenue, which could limit upside in the near term.
- There are questions about whether the recent upgrade in guidance is sustainable, especially with evolving global macroeconomic pressures.
- Potential headwinds around client budget cycles and elongated deal timelines remain areas to monitor, as these could introduce volatility to future quarters.
What's in the News
- President Trump is expected to sign a proclamation requiring a $100,000 fee for H-1B visa applications. This change could impact Infosys and other outsourcing firms operating in the U.S. (Bloomberg)
- Infosys announced an expansion of its strategic collaboration with Sunrise to accelerate IT transformation, with a focus on advanced technology, AI integration, and enhanced customer experiences.
- The company authorized a share buyback plan to repurchase up to 100 million shares, representing 2.41% of its issued share capital. The aim is to improve return on equity and increase long-term shareholder value.
- Infosys has formed a joint venture with Telstra by acquiring a 75% share in Versent Group. This move enhances its AI and cloud solutions capabilities for Australian enterprises.
- Infosys will hold a Special/Extraordinary Shareholders Meeting on November 4, 2025, via postal ballot in India.
Valuation Changes
- Fair Value Estimate has decreased slightly from ₹1,748.14 to ₹1,720.41 per share.
- Discount Rate has risen marginally from 15.90% to 15.99%, reflecting a modest increase in perceived risk.
- Revenue Growth Forecast has declined from 5.55% to 5.14% annually.
- Net Profit Margin is projected to increase from 16.58% to 16.81%.
- Future P/E multiple has edged down from 33.76x to 32.97x.
Disclaimer
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