Company Reports

Infosys' first-quarter sequential revenue growth of 1% topped our Indian IT coverage. Operating margin was resilient at 21% amid tight enterprise IT spending. Partnership with model providers drove rapid expansion of Infosys' AI revenue, now accounting for 8% of total revenue.

Infosys provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Although Infosys’ size is nowhere near the biggest players in the IT services world, we think the company owns a comprehensive portfolio that can meet any modern enterprise’s tech demand, thanks to its agile adaptability to new technology trends.

Infosys provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Although Infosys’ size is nowhere near the biggest players in the IT services world, we think the company owns a comprehensive portfolio that can meet any modern enterprise’s tech demand, thanks to its agile adaptability to new technology trends.

Infosys closed fiscal 2026 strong, with quarterly revenue growth accelerating to 4% in constant currency. Full-year revenue of INR 1,787 billion benefited from the Indian rupee's recent weakness. However, fiscal 2027 revenue growth guidance of 2.5% at the midpoint missed expectations.

We've lowered our Morningstar Economic Moat Ratings for five IT services companies after reviewing artificial intelligence's potential disruption of the global technology sector.

Infosys provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Although Infosys’ size is nowhere near the biggest players in the IT services world, we think the company owns a comprehensive portfolio that can meet any modern enterprise’s tech demand, thanks to its agile adaptability to new technology trends.

Infosys posted strong third-quarter results, with revenue up 2% year over year in constant currency and adjusted operating margin stable at 21%. Total large deal contract value jumped to a two-year high of $4.8 billion, thanks to the $1.6 billion mega deal with the National Health Service in the UK.

Infosys provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Although Infosys’ size is nowhere near the biggest players in the IT services world, we think the company owns a comprehensive portfolio that can meet any modern enterprise’s tech demand, thanks to its agile adaptability to new technology trends.

Infosys provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Although Infosys’ size is nowhere near the biggest players in the IT services world, we think the company owns a comprehensive portfolio that can meet any modern enterprise’s tech demand, thanks to its agile adaptability to new technology trends.

Infosys posted another strong quarter that tops Indian consulting firms, with revenue up 3% in constant currency to INR 445 billion. Operating margin grew 20 basis points sequentially to 21%, consistent with management's guidance.

Bloomberg reported on Sept. 19 that President Donald Trump is expected to announce a new $100,000 fee on H-1B visa applications. Shares are down up to 5% for IT services providers with high offshore leverage, including Cognizant, Infosys, and Wipro.

Infosys provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Although Infosys’ size is nowhere near the biggest players in the IT services world, we think the company owns a comprehensive portfolio that can meet any modern enterprise’s tech demand, thanks to its agile adaptability to new technology trends.

We are transferring coverage of three major Indian IT services companies—Tata Consultancy Services, Infosys, and Wipro. These companies leverage low-cost offshore labor to deliver a variety of IT services, including consulting and business process outsourcing.

Infosys' first-quarter revenue expanded 4% in constant currency to $4.9 billion, the fastest year-over-year growth across our Indian IT consulting coverage. Operating margin of 20.8% dropped 20 basis points sequentially but was still near the midpoint of 21% that management guided for fiscal 2026.

Narrow-moat Infosys reported fourth-quarter earnings that aligned with our profitability estimates, but the outlook fell short of our expectations. Like its Indian IT services peers, Infosys faced pressure from ongoing global challenges during the quarter. Management issued a bleak fiscal 2026 guidance, expecting 0%-3% revenue growth in constant currency and operating margin in the range of 20%-22%. The upper end of this range reflects cautious optimism on deal momentum, while the lower end recognizes growing risks from ongoing macroeconomic headwinds and restrained discretionary spending. We have revised our estimates accordingly and lowered our fair value estimate to $18 from $20. We view shares as slightly undervalued.

Narrow-moat Infosys released good third-quarter earnings that beat our top- and bottom-line expectations. Despite seasonal weakness, robust demand for support on artificial intelligence projects and a solid large deal pipeline fueled revenue growth. Management raised the fiscal 2025 revenue growth guidance from 3.75%-4.75% to 4.5%-5.0% in constant currency, while maintaining operating margin guidance at 20%-22%. The updated guidance implies results relatively still in line with our previous projections for the year, and we expect a recovery in IT spending to keep driving long-term revenue growth.

Narrow-moat Infosys reported first-quarter earnings above consensus on both the top and bottom lines. Better yet, management offered an improved revenue outlook for 2025, citing wins from vendor consolidation that have helped offset overall spending conservatism.

We are maintaining our $16 fair value estimate for narrow-moat Infosys after the firm closed out fiscal 2024 with financial results and guidance reflecting the weak demand landscape as companies rethink their IT spending during a period of macroeconomic uncertainty. While the near-term picture remains murky, we reiterate our confidence in Infosys’ long-term opportunity as secular tailwinds such as digital transformations, cloud migrations, and increased usage of AI stand to drive demand for IT services vendors. With shares trading down sharply after the firm reported earnings, we view Infosys’ shares as fairly valued.

We are maintaining our $16 fair value estimate after narrow-moat Infosys closed out its third quarter with financial results below our prior estimates as we still believe revenue will bounce back next year. Similar to their peer, Tata Consultancy Services, which reported on Jan. 11, 2024, Infosys' financials continued to be weighed down by weak customer demand for IT service solutions amid macroeconomic uncertainty. While we reiterate our long-term positive outlook on Infosys, we believe the market is projecting a rosier future for the firm, with shares trading at a slight premium to our fair value estimate.

Infosys’ second-quarter results surpassed our expectations on the top line and came right in line with our EPS expectations, although the market was baking in a stronger EPS, hence the 6% drop in the stock price upon results. Despite the revenue beat compared with our expectations and those of the market, the company lowered growth expectations (on a constant currency basis) for the year. Nonetheless, we were already baking in more conservative top-line growth. We maintain our fair value estimate for Infosys at $16 per share. We continue to think Infosys’ moat sources are well protected and the firm will be prepared to bounce back once discretionary spending loosens up.