CITI on Infosys
Neutral, TP cut to Rs 1,300 from Rs1,395
Reported a weak 4Q, with revenues & EBIT margins coming in below expectations.
FY27 guidance is largely in line with expectations, at mid-point.
Forward looking indicators:
(a) Revenue guide – 1.5-3.5% cc yoy,
(b) TTM large TCV +28% yoy,
(c) Headcount +1.5% yoy,
(d) Mgmt commentary – slower decision making in March; high competitive intensity
Lower FY27E/28E EPS by 1-2%
Believe Infosys will continue to deliver better performance compared to peer group in FY27 as well
Nomura on Infosys
Buy, TP Rs 1640
4Q FY26 – marginal miss at revenue and modest beat at margin
FY27E guidance largely inline at the mid-point; better outlook for BFSI and EURS verticals
Expect margins to remain stable at around 21% in FY27F
Infy management noted that based on the deal wins, and AI partnerships, it expects growth acceleration in BFSI, and Energy, Utilities, Resources and Services (EURS) verticals in FY27E
Expect Infy to post 3.4% USD revenue growth in FY27E.
Stock currently trades at 15x FY27F EPS of INR82.
HSBC on Infosys
Buy, TP Rs 1585
4Q a bit softer than expected, though FY27 guidance in line with expectations post recent drop in sector sentiment
Upper end, if achieved, could have a positive read-across for sector, as it assumes decent pick-up in 1H
Stock near five-year low despite 50% EPS growth this period
Jefferies on Infosys
Hold, TP Rs 1235 from earlier Rs1,290
Q4 in line with est. however weaker-than expected growth guidance of 1.5%-3.5%, 3% QoQ decline in headcount & 19% YoY decline in net-new deal wins disappointed
Raise estimates by 1-2% due to Fx & expect Infosys to deliver 7% recurring EPS CAGR.
While 4% dividend yield caps downsides, worsening growth outlook limits upsides
MOSL on Infosys
Buy, TP Rs 1425
Tough road ahead
AI deflation begins to bite as FY27 guidance comes in soft
4QFY26 revenue of $5b, down 1.2% QoQ.
In CC, it was down -1.3% QoQ, below estimate of -0.7% QoQ.
Adj. EBIT margin stood at 21%, below estimate of 21.2%.
Adj. EBIT rose 16.6% QoQ/13.6% YoY to INR97b (est. INR98b).
Adj. PAT came in at INR88b, up 15.4% QoQ/21% YoY, above estimate of INR73b
Guidance for FY27 is maintained at 1.5-3.5% YoY cc (vs. expectation of 1.5-4.5% YoY cc).
Adj. EBIT margin guidance was maintained in the 20-22% range.
Large deal TCV stood at USD3.2b, down 33.3% QoQ. The book-to-bill ratio was 0.6
DAM Cap on Infosys
Downgrade to Neutral, TP Rs 1300
Weak guidance; Medium term outlook uncertain
Cos FY27 rev growth guidance of 1.5-3.5% YoY (inc 25bps from Stratus acquisition) remains below expectations.
Optimum health and Versant could add another 1% to growth
Co continues to see headwinds from intense competition and higher productivity ask by the clients.
FY27 (4Q) will also see ramp down of a large European auto client impacting revenues by 1%
Expect company to post growth of 4% YoY in FY27 (inc all 3 acquisitions).
Organic growth could be in 2.8-3% YoY CC range.
Three quarters of incremental impact form European auto client will also keep FY28 growth rate in check.
Morgan Stanley on Infosys
Recommendation: Equal-weight; Target: ₹1380, Earlier Target: ₹1760
Lack of growth acceleration in FY27 weighs on multiples
Q4 surprised negatively on all key counts
FY27 revenue growth guidance doesn’t inspire confidence in an acceleration
Still, post correction (reflected in the ADR), see its multiples coming close to Wipro, making a case for some downside protection
Kotak Securities on Infosys
Recommendation: Buy, Target: ₹1440, Earlier Target: ₹1530
FY27E: Another year of subpar growth
Q4FY26 revenue misses estimates on lower third-party items and slower March
Guidance of 1.5-3.5% embeds client-specific headwinds; H1 stronger than H2
Four tough years will weigh on multiples
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