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Infosys (INFY)
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Infosys (INFY) AI Stock Analysis

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INFY

Infosys

(NYSE:INFY)

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Outperform 74 (OpenAI - 4o)
Rating:74Outperform
Price Target:
$19.00
▲(15.78% Upside)
Infosys presents a strong financial position with consistent profitability and low leverage, contributing significantly to the score. The earnings call provided a mixed outlook with strong growth but highlighted challenges. Technical indicators suggest potential short-term weakness, while valuation metrics are reasonable. Overall, Infosys is well-positioned but faces some external challenges.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective client engagement, supporting long-term business expansion and stability.
Cash Flow Management
Strong cash flow management enhances liquidity and provides financial flexibility to invest in growth opportunities and manage economic uncertainties.
Enterprise AI Leadership
Leadership in AI positions Infosys as a key player in digital transformation, attracting new clients and retaining existing ones, driving future growth.
Negative Factors
Operating Margin Decline
Declining operating margins could pressure profitability, necessitating cost management strategies to sustain financial health and competitive positioning.
Increased Attrition
Rising attrition rates may impact project delivery and increase recruitment costs, challenging Infosys to maintain workforce stability and expertise.
Cautious Client Spending
Cautious client spending can slow revenue growth, requiring Infosys to adapt strategies to mitigate the impact of external economic factors.

Infosys (INFY) vs. SPDR S&P 500 ETF (SPY)

Infosys Business Overview & Revenue Model

Company DescriptionInfosys (INFY) is a global leader in technology services and consulting, headquartered in Bangalore, India. Founded in 1981, the company operates in various sectors, including financial services, manufacturing, healthcare, and retail, providing a range of services such as application development and maintenance, IT infrastructure management, and business process outsourcing. Infosys leverages advanced technologies such as artificial intelligence, cloud computing, and data analytics to deliver innovative solutions to its clients worldwide.
How the Company Makes MoneyInfosys generates revenue primarily through its IT services and consulting offerings, which include software development, maintenance, and support, as well as business process outsourcing services. The company operates on a project-based billing model, where clients are charged based on the services rendered, often through fixed-price contracts or time-and-material agreements. Key revenue streams include large-scale contracts with Fortune 500 companies, particularly in industries like banking, insurance, and retail. Additionally, Infosys has established significant partnerships with major technology firms, such as Microsoft, AWS, and Google Cloud, enhancing its service capabilities and expanding its market reach. The company also invests in research and development to create proprietary solutions, further driving its revenue growth.

Infosys Earnings Call Summary

Earnings Call Date:Oct 16, 2025
(Q1-2026)
|
% Change Since: |
Next Earnings Date:Jan 14, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. Infosys reported strong revenue growth, large deal wins, and leadership in AI, but faced challenges with operating margin declines, increased attrition, and client spending caution due to macroeconomic uncertainties.
Q1-2026 Updates
Positive Updates
Strong Revenue Growth
Infosys reported a sequential revenue growth of 2.6% and a year-on-year growth of 3.8% in constant currency terms for Q1 FY '26.
Large Deal Wins
The company secured large deals worth $3.8 billion, including 55% net new deals, reflecting strong client relationships and delivery capabilities.
Enterprise AI Leadership
Infosys showcased its leadership in enterprise AI by building 300 AI agents and being recognized as a leader in Gartner's first generative AI consulting and implement services quadrant.
Cash Flow and Profitability
Infosys reported free cash flow of $884 million, which is 109% of net profit, marking the fifth consecutive quarter of free cash flows exceeding net profit.
Geographic Growth
Europe demonstrated strong performance with a 12.3% year-on-year growth, over three times the company average.
Negative Updates
Operating Margin Decline
Operating margin for Q1 was 20.8%, a decline of 20 basis points sequentially and 30 basis points year-on-year.
Increased Attrition
Attrition rates increased marginally to 14.4%.
Challenges in Manufacturing and Retail Sectors
The manufacturing segment faced challenges with decision-making delays and soft discretionary spend, while retail saw muted spending due to tariff uncertainty.
Cautious Client Spending
Clients remained cautious in their discretionary spending due to tariff and geopolitical uncertainties, leading to delayed decision-making.
Company Guidance
In the Q1 FY '26 earnings call for Infosys, the company reported a sequential revenue growth of 2.6% and a year-on-year increase of 3.8% in constant currency terms. The operating margin stood at 20.8%, while the free cash flow was $884 million. Large deals totaled $3.8 billion, with 55% being net new. The company revised its revenue growth guidance for FY '26 to 1%-3% in constant currency, maintaining its operating margin guidance at 20%-22%. The leadership highlighted the company's strong performance in enterprise AI, with 300 AI agents deployed across various sectors, and noted robust demand in areas like cloud and data analytics. Despite the positive start, the executives remained cautious due to ongoing global uncertainties, including tariff issues and geopolitical tensions, which continue to impact client spending and decision-making processes.

Infosys Financial Statement Overview

Summary
Infosys presents a strong financial profile with consistent revenue growth, high profitability margins, and robust cash flow generation. The company maintains a healthy balance sheet with low leverage and strong equity financing. While profitability slightly dipped in the most recent year, the overall financial health remains solid. Infosys' effective cash management ensures liquidity and the ability to fund growth initiatives. Continued vigilance on cost structures and liabilities will be essential to sustain this positive trajectory.
Income Statement
85
Very Positive
Infosys has demonstrated consistent revenue growth over the years, with a notable increase from $13.56B in 2021 to $19.28B in 2025. The gross profit margin is healthy at approximately 26.34% in 2025, indicating efficient cost management. The net profit margin remains strong at 16.39% in 2025, reflecting robust profitability. EBIT and EBITDA margins are also impressive at 21.48% and 26.28% respectively, underscoring operational efficiency. However, a slight decline in gross profit and net income compared to 2024 suggests a need for careful monitoring of cost structures.
Balance Sheet
80
Positive
Infosys maintains a solid balance sheet with a low debt-to-equity ratio of 0.09 in 2025, indicating prudent leverage management. The equity ratio is strong at 64.37%, highlighting substantial equity financing. Return on equity (ROE) is stable at 28.19%, showcasing effective utilization of shareholder funds to generate profits. The company's strong cash position further enhances financial stability. However, the slight increase in total liabilities from 2024 to 2025 warrants attention.
Cash Flow
78
Positive
Infosys exhibits impressive cash flow management, with a significant growth in free cash flow from $2.88B in 2024 to $4.20B in 2025, marking a 45.66% increase. The operating cash flow to net income ratio is strong at 1.41, indicating efficient cash generation relative to net income. The free cash flow to net income ratio is equally robust at 1.33, underscoring the company's ability to generate substantial free cash flow. These metrics reflect Infosys' strong cash flow management and liquidity position.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue19.50B19.28B18.56B18.21B16.31B13.56B
Gross Profit5.94B5.87B5.47B5.50B5.32B4.61B
EBITDA4.41B5.07B4.97B4.71B4.53B4.05B
Net Income3.20B3.16B3.17B2.98B2.96B2.61B
Balance Sheet
Total Assets17.45B17.42B16.52B15.31B15.55B14.82B
Cash, Cash Equivalents and Short-Term Investments4.09B4.67B3.43B2.32B3.19B3.70B
Total Debt296.41M962.53M1.00B1.01B722.00M728.00M
Total Liabilities6.33B6.17B5.92B6.09B5.56B4.32B
Stockholders Equity11.07B11.21B10.56B9.17B9.94B10.44B
Cash Flow
Free Cash Flow3.94B4.20B2.88B2.53B3.06B2.97B
Operating Cash Flow4.25B4.46B3.15B2.85B3.35B3.26B
Investing Cash Flow-472.78M-471.45M-708.00M-218.00M-1.00B-1.13B
Financing Cash Flow-3.92B-2.86B-2.12B-3.29B-3.33B-1.32B

Infosys Technical Analysis

Technical Analysis Sentiment
Negative
Last Price16.41
Price Trends
50DMA
16.64
Negative
100DMA
17.04
Negative
200DMA
17.82
Negative
Market Momentum
MACD
0.05
Positive
RSI
45.09
Neutral
STOCH
14.10
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INFY, the sentiment is Negative. The current price of 16.41 is below the 20-day moving average (MA) of 16.65, below the 50-day MA of 16.64, and below the 200-day MA of 17.82, indicating a bearish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 45.09 is Neutral, neither overbought nor oversold. The STOCH value of 14.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INFY.

Infosys Risk Analysis

Infosys disclosed 58 risk factors in its most recent earnings report. Infosys reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Infosys Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
$154.07B20.4425.82%2.43%7.36%6.18%
$35.10B16.8614.50%1.72%7.44%-4.57%
$9.01B23.0611.36%9.73%-0.29%
$284.84B36.4530.25%2.38%4.51%21.89%
$69.53B20.7929.15%3.17%4.62%1.06%
$28.37B17.3916.39%3.14%-1.97%48.61%
$37.18B12.37-10.20%1.83%8.50%-7.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
INFY
Infosys
16.41
-3.80
-18.80%
ACN
Accenture
248.44
-88.43
-26.25%
CTSH
Cognizant
72.73
-1.01
-1.37%
EPAM
Epam Systems
161.71
-27.59
-14.57%
IBM
International Business Machines
304.73
104.08
51.87%
WIT
Wipro
2.61
-0.49
-15.81%

Infosys Corporate Events

Infosys Announces ₹18,000 Crore Share Buyback Proposal
Oct 22, 2025

On October 22, 2025, Infosys Limited announced its proposal to buy back equity shares worth ₹18,000 Crore at a price of ₹1,800 per share, representing 2.41% of its total equity share capital. This move, pending shareholder approval, aims to enhance shareholder value and optimize the company’s capital structure. The draft Letter of Offer has been filed with the U.S. Securities and Exchange Commission for regulatory purposes, with the final offer to be issued in compliance with Indian regulations.

Infosys Reports Strong Q2 2025 Results and Strategic Collaborations
Oct 21, 2025

On October 16, 2025, Infosys announced its financial results for the quarter and six months ended September 30, 2025, reporting a quarterly revenue of $5.076 billion, marking a 2.9% year-on-year growth in constant currency. The company achieved strong deal wins with a total contract value of $3.1 billion and maintained robust free cash flow generation. Infosys also announced strategic collaborations with major clients like ABN AMRO, Mastercard, and Telstra to enhance digital transformation and AI integration. The company continues to position itself as a leader in digital innovation, with a focus on AI-driven solutions and sustainable growth.

Infosys Announces Q2 2025 Financial Results and Strategic Moves
Oct 16, 2025

On October 16, 2025, Infosys Limited announced its financial results for the quarter and half-year ended September 30, 2025. The company declared an interim dividend of 23/- per equity share, with a record date of October 27, 2025, and a payout date of November 7, 2025. Additionally, the Board approved stock grants under the 2015 and 2019 Stock Incentive Plans, and announced the incorporation of a new subsidiary in Egypt. As part of an internal reorganization, Infosys transferred 90% of its shareholding in Infosys Consulting S.R.L., Argentina, to Infosys Nova Holdings LLC.

Infosys Announces Postal Ballot for Equity Share Buyback
Sep 29, 2025

On September 29, 2025, Infosys Limited announced the dispatch of a Postal Ballot Notice to its shareholders, seeking approval for a special resolution regarding the buyback of equity shares. The e-voting process for this resolution is set to commence on October 6, 2025, and conclude on November 4, 2025. This move is part of Infosys’s strategic financial management, potentially impacting shareholder value and market perception.

Infosys Announces Postal Ballot for Equity Buyback Proposal
Sep 26, 2025

On September 26, 2025, Infosys Limited announced a Postal Ballot Notice to its shareholders regarding a proposed buyback of equity shares. The buyback is to be conducted on a proportionate basis through a tender offer, and the company has engaged NSDL for facilitating e-voting. The e-voting process will run from October 6 to November 4, 2025. This move is part of Infosys’s strategic financial management to enhance shareholder value. The buyback proposal is yet to be approved by shareholders, and if approved, it will be executed following the necessary regulatory filings and approvals.

Infosys Secures SEC Exemptive Relief for Major Share Buyback
Sep 12, 2025

On September 12, 2025, Infosys Limited announced that it received exemptive relief from the U.S. Securities and Exchange Commission (SEC) regarding its proposal to buy back up to 10 crore fully paid-up equity shares, valued at ₹18,000 crore. This buyback is subject to shareholder approval through a special resolution and aims to align with both Indian and U.S. regulatory requirements. The announcement marks a significant step in Infosys’s strategic financial management, potentially impacting its stock market performance and shareholder value.

Infosys Announces ₹18,000 Crore Share Buyback Plan
Sep 11, 2025

On September 11, 2025, Infosys Limited announced that its Board of Directors approved a proposal to buy back equity shares worth ₹18,000 Crore at a price of ₹1,800 per share. This buyback represents up to 2.41% of the company’s total paid-up equity share capital and is subject to shareholder approval through a special resolution. The buyback aims to enhance shareholder value and will be conducted through a tender offer route, with the company seeking exemptive relief from the U.S. SEC due to regulatory differences between Indian and U.S. laws. The buyback committee, comprising key company officers, will oversee the process.

Infosys Board to Consider Equity Share Buyback Proposal
Sep 8, 2025

On September 8, 2025, Infosys Limited announced that its Board of Directors will consider a proposal for the buyback of equity shares. This move, communicated to the stock exchanges and filed with the United States Securities and Exchange Commission, could impact the company’s capital structure and shareholder value, reflecting Infosys’s strategic financial management decisions.

Infosys Updates on McCamish Cyber Incident
Aug 6, 2025

Infosys Limited has reported an update on the McCamish Cyber Incident as of August 5, 2025. This update was formally submitted to the United States Securities and Exchange Commission on August 6, 2025. The incident’s details were shared with stock exchanges, reflecting Infosys’ commitment to transparency and compliance. The update signifies the company’s proactive measures in addressing cybersecurity challenges, which are crucial for maintaining stakeholder trust and safeguarding its operations.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 31, 2025