ICICI Securities research report on Infosys
Infosys’ weak guidance with a widened range of 0-3% YoY CC for FY26 is due to 1) weak exit growth rate of -1.1% YoY CC, 2) heightened uncertainty due to global tariff wars and 3) lack of mega deals reflected in muted TCV of USD 11.6bn, down 34% YoY in FY25. While TCS and Wipro acknowledged deferrals of projects in latter half of Q4FY25, Infosys did not call out project ramp downs. However, management mentioned that client decision making has slowed down, likely impacting pipeline to TCV conversion. Total bookings at USD 11bn with 56.5% net new were down 34% YoY in FY25 due to mega deals in base year. We cut EPS by 5%/7% for FY26/27E due to a cut in revenue estimates.
Outlook
We continue to value INFY at 21x on Q4FY26-Q3FY27 EPS of INR 70 to arrive at a revised TP of INR 1,470. Maintain HOLD. Pause in recovery of discretionary spends is likely to have higher impact on INFY vs peers.
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