Analysts Are Updating Their Infosys Limited (NSE:INFY) Estimates After Its Second-Quarter Results

Last week, you might have seen that Infosys Limited (NSE:INFY) released its quarterly result to the market. The early response was not positive, with shares down 2.9% to ₹1,880 in the past week. Revenues of US$4.9b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.19, missing estimates by 4.7%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Infosys

Taking into account the latest results, the consensus forecast from Infosys' 52 analysts is for revenues of US$19.4b in 2025. This reflects a modest 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 2.8% to US$0.76 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.3b and earnings per share (EPS) of US$0.77 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of ₹2,016, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Infosys analyst has a price target of ₹2,330 per share, while the most pessimistic values it at ₹1,503. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Infosys shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Infosys' revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2025 being well below the historical 9.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Infosys.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Infosys. Long-term earnings power is much more important than next year's profits. We have forecasts for Infosys going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Infosys , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.