Infosys Share Price Target at Rs 1,830: DevenChoksey Research
DevenChoksey Research has issued a BUY recommendation for technology major Infosys Limited, projecting a compelling upside for investors in the coming quarters. The report lauds Infosys’s Q1FY26 performance, highlighting broad-based revenue gains, resilient margins, and momentum in large deal wins—particularly across European markets. With the company navigating shifting demand dynamics and demonstrating sharp operational management, the brokerage sees the stock as attractively valued against peers, firmly reiterating its BUY stance and setting a target price of Rs1,830, representing a 16.2% potential upside from the current level. While technology sector is witnessing a major change with AI based solutions, Indian technology companies like Infosys, HCL Technologies and TCS have been performing well.
DevenChoksey's View on Infosys
Robust Q1FY26 results have cemented Infosys’s position as a preferred pick in the IT sector, led by strong growth in large deals and decisive execution on AI-driven transformation projects.
The research house expects continued momentum in Financial Services, Manufacturing, and Energy/Utilities, offsetting headwinds in sectors like Hi-Tech and Life Sciences.
Valuation multiples remain competitive—Infosys currently trades at 23.1x FY26E EPS, below both its historical average and sector peers.
Target price set at Rs1,830 reflects elevated confidence in revenue and margin resilience, with forward guidance projecting operating margins within 20.0-22.0% and improved earnings growth trajectory.
Investment Thesis: Why Infosys Remains a BUY
Q1FY26 Performance Surpasses Expectations
Infosys’s Q1FY26 results exceeded market estimates on every key metric. Consolidated revenue stood at Rs4,22,790 million, up 3.3% sequentially and a robust 7.5% year-on-year, outpacing forecasts by 4.0%. USD revenue also posted solid growth at $4,941 million (2.6% QoQ, 3.8% YoY in constant currency). EBIT reached Rs88,030 million (20.8% margin), aligning with projections and underscoring disciplined cost management amid wage hikes and currency headwinds. Net profit aggregated Rs69,210 million, registering an 8.7% YoY increase.
Margin Levers Show Resilience
While the EBIT margin ticked down 20bps sequentially, management demonstrated notable prowess in sustaining profitability. Savings from Project Maximus, lowered third-party costs, and efficient utilization offset external pressures from wage inflation and currency volatility. The report highlights further scope for margin expansion through operational excellence and AI-led productivity improvements.
Segmental and Geographic Performance
Growth Engines Remain Intact
Sectoral outperformance was clear in Manufacturing (+12.2% YoY constant currency), Energy/Utilities (+6.4%), Financial Services (+5.6%), and Communications (+4.0%). Europe, driven by mega deals, delivered a striking 12.3% YoY growth (CC), eclipsing North America and the rest of the world. Despite sustained momentum, Hi-Tech (+1.7%) and especially Life Sciences (-7.9%) and Others (-15.3%) lagged amidst demand slowdown and macroeconomic uncertainties.
Diversified Client Wins Bolster Outlook
Infosys added 93 new clients, maintaining an active base of 1,861. Standout metrics included 28 fresh deal wins for a total contract value (TCV) of $3,797 million—up 46% QoQ but down slightly YoY due to a high base. North America continued as a strategic client acquisition hub, contributing 20 out of 28 large deals.
Demand Dynamics and Future Guidance
AI-led Transformation and Deal Pipeline
Financial Services is slated for medium-term growth, with Infosys serving as a preferred AI transformation partner for 10 of its top 20 clients. Manufacturing remains buoyed by end-to-end digitalization initiatives and supply chain overhauls, while Energy and Utilities benefit from sustainability-driven projects and vendor consolidation.
Retail, Hi-Tech, and Life Sciences currently exhibit softness, with clients delaying projects and focusing on margin retention rather than expansion amidst tariff and supply chain headwinds.
Earnings Visibility Remains Strong
Infosys has deployed over 300 AI Agents, delivering measurable productivity advances. The company upgraded its full-year revenue guidance to 1-3% YoY constant currency, with management projecting stronger H1FY26 supported by higher conversion of large and mega deals.
Financial Analysis
Key Operating Metrics
- Revenue CAGR (FY25-27E): 5.3%
- Adjusted PAT CAGR (FY25-27E): 6.2%
- EBIT margin (FY26E): 21.5%
- Return on Equity (FY27E): 27.5%
- Dividend yield (FY27E): 3.1%
- P/E (FY26E): 20.3x
Shareholding Trends and Employee Dynamics
- Promoters held a stable share at 14.6% in June 2025
- Foreign Institutional Investors (FII) at 31.9%, Domestic Institutions (DII) at 39.4%
- Employee headcount marginally increased by 210 to 323,788; attrition inched higher to 14.4%
Valuation and Peer Comparison
Infosys Trades at Discount to Historical Levels
Infosys is priced attractively at 23.1x FY26E earnings versus its 10-year NTM P/E average of 24.5x and the sector median. Here's a comparative snapshot:
| Company | Price (Rs) | Mkt Cap (USD Bn) | Revenue CAGR (FY25-27E) | EPS CAGR (FY25-27E) | EBIT Margin (FY26E) | P/E (FY26E) | Dividend Yield (FY26E) | ROE (FY26E) |
|---|---|---|---|---|---|---|---|---|
| Infosys | 1,575 | 77 | 5.3% | 6.2% | 21.1% | 20.3x | 4.3% | 27.9% |
| TCS | 3,440 | 145 | 5.5% | 7.5% | 24.3% | 23.8x | 3.7% | 53.6% |
| HCL Tech | 1,692 | 53 | 6.6% | 5.9% | 18.3% | 25.8x | 5.5% | 24.3% |
| Wipro | 260 | 32 | 3.4% | 2.0% | 17.0% | 20.7x | 4.8% | 15.5% |
| Tech Mahindra | 1,659 | 19 | 5.2% | 22.8% | 9.7% | 28.7x | 3.4% | 18.5% |
Outlook, Share Price Levels, and Analyst Recommendation
Price Action and Investor Strategy
Infosys shares currently trade at Rs1,575, with a 52-week high/low of Rs2,006/Rs1,307. The recommended BUY rating is anchored in the company’s robust fundamentals, highly visible deal pipeline, and attractive valuation. The 12-month target price is Rs1,830, offering a 16.2% potential upside for investors. The research house expects renewed outperformance as large deals convert to revenue and margin levers strengthen.
- BUY at or below the current level of Rs1,575 for a target of Rs1,830
- Monitor results and sector-wide trends, especially in upcoming quarters as AI and digital transformation momentum accelerates
Bottomline
DevenChoksey Research remains bullish on Infosys, underpinned by strong top-line growth, margin stability, and disciplined capital allocation. With industry-leading execution and operational acumen, Infosys stands out as a premier opportunity for investors seeking exposure to India’s IT sector renaissance.
