Infosys' weak Q4 earnings have a price, brokerages slash targets by 9-13%

Following a 12% year-on-year (YoY) decline in Infosys' March quarter consolidated net profit and lower-than-estimated revenue, brokerages have slashed their target prices while retaining a 'Buy' rating on the stock. Nuvama Institutional Equities and Emkay Global revised their targets downward amid topline miss and prevailing uncertainties.

On Thursday, India's second-largest IT services company by market capitalisation reported a consolidated profit after tax (PAT) of Rs 7,033 crore in Q4FY25, compared to Rs 7,969 crore in the year-ago period. The tier-1 IT services company reported Q4FY25 revenue of Rs 40,925 crore, up 8% from Rs 37,923 crore in the corresponding quarter of the previous financial year.

Commenting on Infosys' January–March quarter results, Nuvama said the company's revenue decreased by 3.5% in constant currency on a quarter-on-quarter (QoQ) basis (+4.8% YoY), significantly below its estimate of a 1% QoQ drop in CC.


Nuvama has slashed its target price to Rs 1,700 from the earlier Rs 1,870. It has trimmed FY26E and FY27E EPS by 3.7% and 4.6%, respectively, on account of the Q4 revenue miss. "We continue to value Infosys at 24x FY27 PE," it said, while maintaining a 'Buy'.

Emkay Global also called Infosys' Q4 revenue performance "disappointing", highlighting a miss in the company’s implied growth guidance. The brokerage trimmed FY26–27E EPS by 4.3–5.6%, factoring in the Q4 miss and FY26 guidance. While retaining a 'Buy' rating, Emkay cut the price target by 13% to Rs 1,650, valuing the stock at 23x Mar-27E EPS, down from 25x earlier.

Management attributed two-thirds of the sequential revenue decline to lower pass-through revenue, along with some deal slippages. The remaining one-third decline was ascribed to a seasonal volume drop.

Infosys’ EBIT margin (EBITM) declined by 30 basis points to 21% due to wage hikes.

Among the positives was the large-deal total contract value (TCV) in Q4, which remained steady at $2.6 billion, with 63% of it being net new.

The company has projected revenue growth of 0%–3% in constant currency and an operating margin of 20%–22% for FY26.

Emkay noted that the guidance was issued amid heightened uncertainty and increased client cautiousness in the current environment.

"The management indicated that the upper end of the guidance assumes normal seasonality, while the lower end factors in the risk of a weak start and further deterioration in the macro environment. It has guided for an EBITM band of 20–22% for FY26, with an effort to improve its margin trajectory," Emkay said.

Read More: Infosys Q4 Results: Cons PAT falls 12% YoY to Rs 7,033 crore, revenue rises 8%

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