Infosys shares slip despite solid Q1 show, revenue beat; should you buy, sell, or hold?
Brokerages largely reiterated their bullishness on IT services giant Infosys, believing that the tech player is best positioned among its large-cap peers.
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Information and technology major Infosys Ltd reported its earnings show for the June quarter, leading to a slew of brokerages reiterating their bullishness on the IT services giant as its results came ahead of expectations.
Infosys reported an 8.7 percent year-on-year rise in consolidated net profit to Rs 6,921 crore for the quarter ended June 30, 2025, beating Street expectations. Revenue for the fiscal first quarter grew 7.5 percent to Rs 42,279 crore.
Infosys said it expects revenue growth of 1-3 percent in constant currency terms for FY26, revised up from 0-3 percent earlier. The firm maintained its operating margin guidance at 20-22 percent.
However, brokerages noted that including inorganic contribution (0.4 percent), the revenue guidance actually translates into a cut at the top end of the guidance – attributed to continued macro uncertainty by the management.
As a result of the macro uncertainty, the manufacturing and retail verticals were the most impacted. There are some opportunities in Europe, which are largely driven by consolidation and outsourcing.
At 10.15 a.m., shares were trading in the red, lower by 1 percent at Rs 1,557.5 on the NSE.
Should you buy, sell, or hold shares of Infosys?
Domestic brokerage Nuvama Institutional Equities said, "Infosys reported solid growth – both in magnitude and quality (lower third-party revenue). The guidance upgrade was a tad soft – but
understandably so, given the overall macro uncertainty." The brokerage maintained its buy call, with an increased price target of Rs 1,850 per share, up from Rs 1,700 earlier.
International brokerage Morgan Stanley noted that Infosys result for the quarter was more balanced, when compared to peers. The brokerage said that Infosys is likely to deliver the strongest EBIT growth within the large-cap IT universe in the current fiscal year. It maintained its overweight call, with a price target of Rs 1,700 apiece.
CLSA said that the IT giant earnings growth was better than estimates, and "ticked all the right boxes." The broking house reiterated its outperform call, with a price target of Rs 1,861 per share. Bernstein concurred, stating that Infosys delivered a solid quarter, beating revenue and order book estimates. The brokerage also kept its outperform call intact.
On the other hand, Motilal Oswal kept its neutral call. The brokerage said that despite the strong Q1, Infosys continues to see a wait-and-watch posture among clients, with no material improvement
in discretionary budgets or decision cycles. Tariff uncertainties and geopolitical tensions continue to weigh on sentiment. "Management stated that the macro environment remains unchanged vs. 4Q, which was a key reason for the cautious stance on guidance," added the broking house.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
2025-07-24
By
Anushka Tripathi
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