Will the 8% ADR increase and Q3 results cause Infosys’ stock to soar today? Check target prices; brokerages are optimistic.
Infosys Q3 FY26 Results Review and Stock Outlook: Strong deal momentum, increased revenue growth, and improved demand visibility are all highlighted by bullish brokerages. Early indications of a revival in discretionary expenditure, according to analysts.
Following the IT giant’s Q3 FY26 results, an upward revision in sales guidance, and a strong increase in its US-listed ADRs, Infosys Ltd. shares are under scrutiny on Friday. Despite a headline profit deficit due to a one-time labor code-related penalty, bullish brokerage notes indicate improved demand visibility, strong deal velocity, and an increased revenue growth expectation.
infy share price Ahead of the stock’s next trading session in India, Infosys’ American Depository Receipts increased 7.6% over two US trading sessions after the earnings announcement, indicating a favorable response from investors abroad.
Infosys reported a 2.2 percent year-over-year drop in consolidated net profit to Rs 6,654 crore in its Q3 FY26 results, which was less than what the Street had anticipated. A one-time labor code-related charge of Rs 1,289 crore dampened the stated profit. When this effect was taken out of the picture, adjusted profitability held steady, and adjusted operating margin increased by 20 basis points on a quarterly basis to 21.2 percent. At Rs 45,479 crore, revenue for the December quarter increased 8.9 percent year over year.
With two mega deals and a total contract value (TCV) of $4.8 billion in Q3, large-deal momentum continued to be a major plus. Net new deals accounted for 57 percent of the total, supporting medium-term revenue visibility.
Infosys stock call: Analysts are optimistic about demand, AI advancement, and deal wins
Deal wins, according to brokerages, were widespread and showed early indications of a resurgence in discretionary spending, especially in a few verticals. With a target price of Rs 1,779 per share, which suggests an increase of around 11%, CLSA reaffirmed its “Outperform” rating for Infosys. Along with solid transaction wins, consistent revenue growth, and in-line margins, the brokerage highlighted the company’s upward revision of FY26 revenue growth target to 3-3.5 percent in constant-currency terms from 2-3 percent previously. According to CLSA, the guidance raise during a seasonally poor quarter indicates better demand circumstances and strengthens confidence in execution.
Additionally, HSBC kept its “Buy” recommendation on Infosys with a higher target price of Rs 1,870 per share, suggesting a roughly 16% increase. The brokerage mentioned strengthening demand comments and better clarity around how artificial intelligence affects customer spending. According to HSBC, customer interest in AI-led transformation and platform modernization activities, as well as stabilizing US corporate attitude, have contributed to a further improvement in sentiment on IT demand, especially in the banking and energy verticals.
A more positive prognosis for FY27, bolstered by AI-led initiatives, vendor consolidation, and platform modernization agreements, as well as early green shoots in discretionary spending, were also mentioned in brokerage comments. Analysts said the general demand narrative has gradually improved, even though several verticals, like manufacturing and high-tech, are still under pressure.
Infosys shares had finished 0.6 percent higher at Rs 1,608.9 on the NSE prior to the release of the Q3 results. The stock has lost more than 17% of its value in the last year, far less than the Nifty 50’s increase of almost 11%. According to brokers, if execution momentum continues, this allows for a re-rating.
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FAQs
Will the 8% ADR surge push Infosys share price higher today?
Infosys’ US-listed ADRs rose nearly 8% over two trading sessions after Q3 FY26 results, reflecting positive global investor sentiment. This could support upward momentum in Infosys shares in India, though domestic market conditions will also play a role.
How did Infosys perform in Q3 FY26 results?
Infosys reported an 8.9% year-on-year increase in revenue to ₹45,479 crore. Net profit declined 2.2% YoY to ₹6,654 crore due to a one-time labour code-related charge. Excluding this, adjusted margins improved sequentially.
Why did Infosys revise its FY26 revenue guidance upward?
The company raised its FY26 revenue growth guidance to 3–3.5% (constant currency) from 2–3%, driven by strong deal momentum, improved demand visibility, and early signs of recovery in discretionary spending.
What was the large deal momentum in Q3 FY26?
Infosys reported total contract value (TCV) of $4.8 billion in Q3, including two mega deals. Net new deals accounted for 57% of TCV, strengthening medium-term revenue visibility.
What are brokerages saying about Infosys stock?
Brokerages remain bullish. CLSA maintained an Outperform rating with a target price of ₹1,779, while HSBC reiterated a Buy with a target of ₹1,870, citing improving demand, AI-led transformation deals, and stronger execution confidence.
How is artificial intelligence impacting Infosys’ outlook?
Analysts note growing client interest in AI-led transformation, platform modernisation, and vendor consolidation. These trends are expected to support growth in FY27 and improve overall demand sentiment.
Which sectors are showing demand recovery for Infosys?
Early signs of recovery are visible in banking and energy verticals, while manufacturing and high-tech sectors remain relatively under pressure, according to analysts.
Has Infosys stock underperformed the market?
Yes. Infosys shares have declined over 17% in the past year, compared to an almost 11% rise in the Nifty 50. Analysts believe continued execution momentum could lead to a stock re-rating.
Is Infosys stock a buy at current levels?
Several brokerages are optimistic, citing improved guidance and deal wins. However, investors should assess their risk profile and consult certified financial advisors before making investment decisions.
