After Wipro, Infosys gets target price cuts post weak Q4 earnings

Infosys Ltd.
| Photo Credit:
Hollie Adams

After Wipro, brokerages have slashed target prices for Infosys amid topline miss and global uncertainties. Infosys on Thursday reported an 11.7 per cent decline in Q4 consolidated net profit to ₹7,033 crore. The IT major also lowered its FY26 revenue growth guidance to 0–3 per cent in constant currency (cc) terms.

Nuvama Institutional Equities expects the demand environment to remain challenging for a couple of quarters due to macro uncertainty. However, the company has not seen any change in deal execution timelines yet.

Meanwhile, Elara Capital has upgraded the stock from reduce to accumulate, citing visibility of at least low mid-single digit growth in this uncertain environment.

Nuvama added that the weak Q4 results were driven by lower third-party revenue. The brokerage has maintained buy rating on Infosys at a lowered target price of ₹1,700 from ₹1,870 earlier, nearly 20 per cent upside potential from previous close.

The tech major announced results post market hours on Thursday. The stock closed at ₹1,420.20 (+0.51 per cent) on the BSE. 

Incoming headwinds

Nuvama has trimmed FY26 EPS estimates by 3.7 per cent, and FY27 EPS estimates by 4.6 per cent, on the Q4 revenue miss.

However, the brokerage is positive on the sector from a medium-to-long term perspective as technology debt continues to be very high for enterprises, which will warrant revival in spending as macro improves. 

Its FY26 guidance suggests near-term headwinds, Elara analysts observed. According to them, the revenue growth guidance of 0-3 per cent for FY26 seems realistic, considering uncertainty in the near term due to tariff-related disruption.

The analysts have factored the 1.3 per cent revenue growth in FY26 estimates (0.7 per cent organic) followed by 4 per cent growth in FY27 as Infosys is likely to be a beneficiary when discretionary spends return.

“Growth may likely pick up in FY27. We are not building in any material margin expansion as unchanged margin band guidance for FY26 suggests limited margin levers in our view,” they added.

Elara has cut FY26-27 earnings estimates by 6-8 per cent and slashed the target price to ₹1,530 from ₹1,830 earlier.

Emkay Global has maintained buy at revised target price of ₹1,650.

Published on April 18, 2025