Reduce Infosys: target of Rs 1030: ICICI Securities

Moneycontrol • 6 days ago

Original source

Key Investment Pillars

  • Revenue growth concerns: Infosys cut its organic revenue guidance to -0.2% YoY CC for FY27 due to softer volumes and pricing pressure from high competitive intensity.
  • Strong deal wins: The company reported a strong deal TCV of USD 5.2bn, up 42.3% QoQ and 68.9% YoY, with 62.4% net new.
  • AI capabilities: AI-first revenue grew to 10.5% of revenue, with management citing examples of AI-driven productivity benefits for clients.
  • Segment-wise outlook: Financial services and EURS are expected to grow faster than the company average, while manufacturing and retail face near-term pressure.

Thesis Validation Checklist

To validate the analyst's thesis, watch for:

  • Revenue growth: Whether Infosys can achieve its revised guidance and show improvement in revenue growth.
  • Deal pipeline: The company's ability to sustain strong deal wins and translate them into revenue growth.
  • AI adoption: The pace of AI adoption and its impact on Infosys' revenue and margins.
  • Margin performance: Whether the company can maintain its EBIT margin despite headwinds from compensation hikes and softer revenue seasonality.