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Informist, Wednesday, Oct. 15, 2025

 

By Anjana Therese Antony

 

MUMBAI – Infosys Ltd. is likely to report better earnings growth in the seasonally strong September quarter even though there are concerns about US policies and the consequent impact on clients' spending on technology. Broking firms have different views about the revenue growth guidance of India's second-biggest information technology company for 2025-26 (Apr-Mar). 

 

Some brokerages expect Infosys will retain its FY26 revenue growth guidance of 1-3%, while others anticipate it will be revised to either the upper end or the lower end of the range. The company is likely to retain the FY26 margin guidance of 20-22%. The margin is expected to improve sequentially, supported by cost efficiency measures, absence of wage hikes, lower third-party costs, and the depreciation of the rupee against the dollar, brokerages said. 

 

The Bengaluru-based company's consolidated net profit is expected to grow almost 4% sequentially and 11% on year to INR 71.97 billion, as per the average of estimates from 16 broking firms. This will be better than the sequential decline of almost 2% and almost 9% on-year rise in the June quarter. The highest bottom line estimate of INR 73.04 billion was from JM Financial Institutional Securities and the lowest projection of INR 70.25 billion was from HDFC Securities. 

 

The company's consolidated revenue is expected to rise 4% on quarter and nearly 8% on year to INR 441.14 billion, as per the average of estimates. This will be better than the 3% on-quarter rise and similar to the 8% on-year increase the company had reported for the June quarter. The highest revenue estimate of INR 445.10 billion was from Equirus Securities and the lowest projection of INR 438.41 billion was from YES Securities. 

 

The company is expected to report strong revenue growth of 1.8% sequentially in constant currency terms and 2.3% rise in dollar terms, largely due to sustained momentum in the financial services segment, brokerage Prabhudas Lilladher said in a report. 

 

Infosys' large deal wins are expected to be in the range of $3 billion-$4 billion for the quarter. This will be higher than the $3.8 billion worth of orders it had won in the June quarter and $2.6-billion contracts in the March quarter.  

 

The company is scheduled to release its quarterly results Thursday. Its post-earnings press conference is scheduled at 1615 IST and the conference call with analysts will be at 1730 IST. Market participants will closely monitor the management's comments on matters such as demand outlook, business in the US market, H-1B visa, clients' discretionary spends, deal conversions, segment-wise outlook, and the pace of clients' decision-making process. 

 

FY26 GUIDANCE

While at least half a dozen broking firms expect Infosys to retain its FY26 revenue growth guidance of 1-3%, four others expect a revision. Three broking firms--Emkay Global, Equirus Securities, and Kotak Institutional--expect the sales growth guidance to be revised to 2-3%. JM Financial estimates the guidance to be 1.0-2.5?ter factoring in the impact of the acquisition of Versent group. Excluding the stake buy in the group company, the brokerage expects the guidance to be 1.5-3.0%. 

 

In August, Infosys had said it would acquire 75% stake in digital transformation solutions provider Australia-based Versent group. The transaction is expected to be completed in the second half of FY26. Some of these broking firms said they have not factored in the impact of the acquisition of Versent group while estimating the sales growth guidance.

 

The company is widely expected to retain its earnings before interest and tax margin guidance of 20-22% for FY26. If so, this will be the 11th consecutive quarter when the company retains the 20-22% guidance. Brokerages expect the margin to grow 20-70 basis points sequentially in the reporting quarter. The margin had fallen 20 bps sequentially to 20.8% in the June quarter due to the impact of wage hikes rolled out in April. It had implemented the first part of its wage hikes in January. 

 

"EBIT margins are expected to expand by 70 bps QoQ and come in at 21.5%, as 1Q (Apr-Jun) has absorbed the impact of wage hikes, third-party costs are expected to be lower, and Project Maximus will continue to contribute to margins," Nirmal Bang Institutional Equities said. Project Maximus is a margin expansion programme the company had announced in 2023 to absorb the impact of a fall in staff utilisation. 

 

STOCK PRICE 

Various broking firms said the stock valuation has reached reasonable levels following its correction in the last three months. Shares of Infosys have fallen more than 6% or by INR 100 since Jul. 23, when the company had released its June quarter results.  

Of the 23 research reports on the company available with Informist, 17 broking firms have a 'buy' or equivalent rating on the stock with an average target price of INR 1,836, which is 25% higher than the current market price. On Wednesday, the stock closed 1% lower at INR 1,474.40 on the National Stock Exchange. However, the stock is still 27% lower than the INR 2,006.45 record high it had hit on Dec. 13, 2024. The remaining six brokerage houses have a 'hold' or equivalent rating with an average target price of INR 1,629.

 

Following are the September quarter earnings estimates for Infosys from 16 brokerage firms in descending order of the estimate of net profit:

 

Broking Firm	Net Profit (INR million)	Net Sales (INR million)	Revenue (in million $)	EBIT margin (in %)
JM Financial Institutional Securities Pvt. Ltd.	73,037	443,552	5,041	--
Equirus Securities Pvt. Ltd.	72,976	445,104	5,045	21.2
Elara Securities (India) Pvt. Ltd.	72,604	439,784	5,038	--
Anand Rathi Share and Stock Brokers Ltd.	72,456	439,980	--	--
Indsec Securities and Finance Ltd.	72,400	439,400	5,000	21.3
Nirmal Bang Equities Pvt Ltd.	72,349	439,700	4,997	21.5
Nuvama Wealth Management Ltd.	72,324	439,322	5,044	21
Prabhudas Lilladher Pvt. Ltd.	72,200	440,700	5,054	21.2
Motilal Oswal Financial Services Ltd.	72,000	444,000	5,082	21.2
HSBC Global Research	71,832	439,763	5,040	21.2
YES Securities (India) Ltd.	71,809	438,407	--	--
Emkay Global Financial Services Ltd.	71,663	443,726	5,060	--
Nomura Equity Research	71,568	439,976	5,040	21
Kotak Institutional Equities	71,299	441,704	5,042	21.1
IDBI Capital Market Services Ltd.	70,729	442,058	5,065	21
HDFC Securities Ltd.	70,250	440,990	5,057	20.7
Average	71,968.50	441,135.38	5,043.21	21.13

 

End

 

US$1 = INR 88.08

 

Edited by Tanima Banerjee

 

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