Neutral Infosys; target of Rs 1650: Motilal Oswal

Motilal Oswal's research report on Infosys

Infosys (INFO) reported 2QFY26 revenue of USD5.0b, up 2.2% QoQ in CC/ 2.9% YoY in CC vs. our estimate of 2.4% QoQ in CC. EBIT margin stood at 21.0% vs. our estimate of 21.2%. EBIT increased 6% QoQ/8% YoY to INR93.5b (est. INR94b). PAT came in at INR74b, up 6.4% QoQ/13.2% YoY, above our estimate of INR72b. Management upgraded the lower end of its FY26 CC revenue growth guidance from 1% to 2%, now expecting growth in the 2-3% range. Large deal TCV stood at USD3.1b, down 18.4% QoQ. The book-to-bill ratio was 0.6x. Net new TCV was down 34% QoQ. For 1HFY26, revenue/EBIT/PAT grew 8%/7%/11% YoY in INR terms. We expect INFO’s revenue/EBIT/PAT to grow 8%/8%/6% YoY in 2HFY26.

Outlook

We reiterate our NEUTRAL rating on INFO with a TP of INR1,650, implying a 12% potential upside.