Neutral Infosys; target of Rs 1750: Motilal Oswal

Motilal Oswal's research report on Infosys

Infosys (INFO) reported 1QFY26 revenue of USD4.9b, up 2.6% QoQ in CC/ 3.8% YoY in CC vs. our estimate of +1.5% QoQ in CC. EBIT margin stood at 20.8% vs. our estimate of 20.9%. EBIT increased 2.6% QoQ/6.2% YoY to INR88b (est. INR87b). PAT came in at INR69b, up 1.7% QoQ/8.7% YoY, above our estimate of INR66b. Management upgraded the lower end of its FY26 CC revenue growth guidance from 0% to 1%, now expecting growth in the 1–3% range. Large deal TCV stood at USD3.8b, up 46% QoQ. The book-to-bill ratio was 0.8x. Net new TCV was up 50% QoQ. For 1QFY26, revenue/EBIT/PAT grew 7.5%/6.2%/1.7% YoY in INR terms.

Outlook

We expect INFO’s revenue/EBIT/PAT to grow 7.1%/9.7%/11.0% YoY in 2QFY26. The company’s work in Enterprise AI has been promising, but near-term catalysts remain limited. We reiterate our NEUTRAL rating on INFO with a TP of INR1,750, implying an 11% potential upside.