Results: Infosys Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

Infosys Limited (NSE:INFY) shareholders are probably feeling a little disappointed, since its shares fell 5.0% to ₹1,411 in the week after its latest annual results. Infosys reported US$19b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.76 beat expectations, being 7.1% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Infosys

Following the latest results, Infosys' 50 analysts are now forecasting revenues of US$19.2b in 2025. This would be a modest 3.2% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$0.76, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.8b and earnings per share (EPS) of US$0.80 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The consensus price target fell 5.7% to ₹1,599, with the weaker earnings outlook clearly leading valuation estimates. 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 ₹1,920 per share, while the most pessimistic values it at ₹1,160. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Infosys' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Infosys is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Infosys. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Infosys going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Infosys that we have uncovered.

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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.