K S Srinivasan 28 October 2026

Infosys Share Price Target at Rs 1,300: Deven Choksey Research

Deven Choksey Research has rated Infosys Accumulate with a target price of Rs 1,300, about 12% above the current market price of Rs 1,165, after a soft second quarter of FY27. Constant-currency revenue rose only 1.5% year on year, EBIT margin held at 21.0%, and management cut its FY27 growth guidance to 1%-2% from 1.5%-3%. Against that, AI revenue jumped 29% sequentially to 10.5% of sales, and large-deal wins reached about Rs 46,280 crore, including a mega deal of more than Rs 17,800 crore. The brokerage expects a gradual recovery from FY28 but sees limited near-term upside, and its history shows a Buy call three weeks earlier.

ACCUMULATE · from Buy
Target raised Rs 1,254 to Rs 1,300
Q2FY27 Result Update
IT Services

Infosys: AI and Deal Wins Promise a Rising Tide, but Not Before FY28

Deven Choksey Research sees a gradual recovery anchored in AI work and a seven-year mega deal, yet trims its stance to Accumulate as guidance slips and pricing pressure lingers.

Tide table · INFY · 12 months

Low water (CMP) ..... Rs 1,165
High water (TP) ..... Rs 1,300
Tidal range ......... +12%
Basis ...... 17x FY28E EPS Rs 76.6
52-week ......... Rs 980 - 1,727
Chart dated ......... Oct. 26, 2026

Harbour-master's board: the levels

Rating	CMP	Target	Upside	52-week range	Valuation basis	Market cap
Accumulate	Rs 1,165	Rs 1,300	~12%	Rs 980 - 1,727	17x FY28E EPS	~Rs 4.73 lakh crore

Investors are pointed to Rs 1,300 over 12 months. In the house's legend, Accumulate covers an expected upside of 5% to 15%, so the stock's rally from Rs 1,013 on Oct. 6 has eaten into the room that once justified a Buy.

A quarter that floated rather than sailed

Infosys delivered a muted second quarter. Reported revenue rose 10.7% year on year to Rs 49,244 crore, but constant-currency growth was a modest 1.5%, and 1.2% sequentially. Softer volumes, limited pricing gains and weak discretionary spending held the top line back. EBIT margin stood at 21.0%, down only 10 basis points quarter on quarter, as currency gains, extra working days and Project Maximus savings absorbed higher customer-support costs, acquisition amortisation and pricing pressure.

Net profit grew a slower 6.2% to Rs 7,823 crore, trailing EBIT growth because other income fell 13.6% and the tax rate climbed to 29.2%. A lower share count after the buyback lifted EPS 8.8% to Rs 19.32.

Rs crore	Q2FY27	Q1FY27	Q2FY26	QoQ	YoY
Revenue	49,244	48,211	44,490	2.1%	10.7%
EBITDA	11,689	11,409	10,535	2.5%	11.0%
EBIT	10,330	10,163	9,353	1.6%	10.4%
EBIT margin	21.0%	21.1%	21.0%	-10 bps	-5 bps
Other income	848	984	982	-13.8%	-13.6%
Net profit	7,823	7,769	7,364	0.7%	6.2%
EPS (Rs)	19.3	19.2	17.8	0.7%	8.8%

Current vs drift: how much of the 10.7% was the ship's own speed

Reported growth, YoY · 10.7%

Constant-currency growth, YoY · 1.5%

Drift from currency and acquisitions · ~9.2 points (TopNews calc)

Arrow lengths to scale. The house's chart caption cites organic sequential growth of 0.8%, against 1.2% in constant currency; the gap reflects inorganic contribution, a basis difference rather than a conflict.

AI raises the mast

The most buoyant number was AI. Revenue from AI work grew 29% quarter on quarter and now makes up 10.5% of the total, up from 8.2% in Q1FY27. Demand is coming from AI-led modernisation, agent development, Process AI and Data for AI, while the Topaz Fabric platform now supports 15 AI models through partnerships with leading AI labs.

There is a catch. Clients are asking Infosys to pass on AI-driven productivity savings, which squeezes pricing on traditional work. Management calls this a transitional adjustment and sees little evidence of clients moving work in-house. Deven Choksey expects the net benefit to show up gradually and not to support FY27 growth materially.

8.2%
Q1FY27

10.5%
Q2FY27

Mast heights to scale: AI revenue as a share of total revenue.

A flotilla of deals sets course for FY28

Infosys signed 19 large deals in the quarter with a total contract value of about Rs 46,280 crore, and 62% of that was net-new business. First-half TCV rose 28% year on year to roughly Rs 78,320 crore. The centrepiece is a seven-year financial-services mega deal worth more than Rs 17,800 crore, which should begin ramping up in late Q4FY27 and add over 1 percentage point to FY28 revenue growth.

The flotilla: 19 large deals in Q2FY27

The hull: Q2 TCV of ~Rs 46,280 crore by type

Net-new 62%

Renewals 38%

Orange sail marks the mega deal. Sails show deal count only, not size.

Guidance runs into shallower water

Management lowered its FY27 constant-currency revenue growth guidance to 1%-2% from 1.5%-3%, citing soft volumes, limited pricing gains and subdued Retail and Hi-Tech spending. Offshoring shifts and a forgone manufacturing deal alone have shaved 1.8-2 points off FY27 growth, according to the note, though the brokerage sees those headwinds as unlikely to recur in FY28.

Seasonal furloughs and fewer working days are likely to weigh on Q3FY27, and growth may pick up from Q4FY27 as the mega deal ramps up. The FY27 EBIT margin band of 20%-22% was kept intact, although wage hikes, AI productivity sharing and acquisition costs pose second-half headwinds.

Depth sounding: FY27 cc guidance

3.5%3.0%2.5%2.0%1.5%1.0%0.5%0%

Old 1.5-3New 1-2

Signal flags from the verticals

The verticals told two stories. Life Sciences surged, with Energy and Financial Services close behind on strong banking, payments and capital-markets demand. Hi-Tech and Retail, which together make up 18.3% of revenue, contracted on client-specific cuts, while Manufacturing and Communications stayed under pressure.

Life Sciences

+32.5%

YoY, constant currency

Energy, Financial Services

Growing

Next in line after Life Sciences

Hi-Tech

-17.3%

YoY

Retail

-7.7%

YoY

North America

-1.5%

Biggest market slipped

Crew, clients and cash in the hold

Headcount rose to 3,32,542, with 13,000 graduates hired in the first half. Attrition eased to 12.7%, utilisation reached 85.4% and the onsite delivery share fell to 22.6%. Subcontractor costs remain elevated at 8%-9% of revenue against 5%-6% before the pandemic, and management says each 1% cost reduction adds 15-20 basis points of margin.

Crew list	Q2FY26	Q3FY26	Q4FY26	Q1FY27	Q2FY27
Headcount	3,31,991	3,37,034	3,28,594	3,28,062	3,32,542
Attrition	14.3%	12.3%	12.6%	13.0%	12.7%

The client base widened to 2,060 active accounts, with 1,048 billing more than about Rs 8.9 crore a year, and top-five client concentration fell to 12.2%. The balance sheet remains a sturdy keel.

Rs 8,898 cr

free cash flow,
113% of profit

64 days

DSO, improved

Rs 26

interim dividend,
up 13%

Zero

debt

Plotting the course to Rs 1,300

Deven Choksey forecasts revenue rising 9.0% to Rs 1,94,644 crore in FY27 and 2.5% to Rs 1,99,565 crore in FY28, with dollar growth improving to 3.6% in FY28. EBIT margin is pencilled in at 20.7% and 20.6%, as wage hikes and pricing pressure offset savings. Profit growth stays modest at 3.9% and 1.4%, supported by strong cash generation and a return on equity near 31%. That the rupee forecast for FY28 trails the dollar forecast implies the house assumes a firmer rupee.

On those numbers, revenue and EPS compound at 5.7% and 2.6% over FY26-FY28. At Rs 1,165, the stock trades at about 15.2x FY28E EPS of Rs 76.6, far below its FY21-25 average of about 28x. Applying a 17x multiple yields the Rs 1,300 fair value. The house is not betting on a return to historical multiples.

Course plot: price per share at FY28E EPS of Rs 76.6

Low 980

CMP 1,165 · 15.2x

TP 1,300 · 17x

52-wk high 1,727

28x avg ~2,145

Scale Rs 950 to Rs 2,200. The lighthouse marks where the historical 28x average would place the stock (TopNews calc); it is not the house's target.

Rs crore	FY26	FY27E	FY28E
Revenue	1,78,650	1,94,644	1,99,565
EBITDA	42,279	45,695	46,897
EBIT margin	20.9%	20.7%	20.6%
Net profit	29,440	30,583	31,008
EPS (Rs)	72.7	75.5	76.6
P/E at Rs 1,165 (TopNews calc)	16.0x	15.4x	15.2x
P/BV at Rs 1,165 (TopNews calc)	5.1x	4.6x	4.2x
RoE	31.2%	31.3%	28.7%

Ship's log: Deven Choksey's calls on Infosys in 2026

Date	CMP (Rs)	Target (Rs)	Call
Jan. 15	1,609	1,852	Buy
April 24	1,155	1,497	Buy
July 22	1,052	1,229	Buy
July 24	1,051	1,254	Buy
Oct. 6	1,013	1,254	Buy
Oct. 26	1,165	1,300	Accumulate

Editor's Note

TopNews found three inconsistencies in the source report:

1. Rating. The note says the brokerage "maintains" Accumulate, but its own recommendation history lists a Buy with a Rs 1,254 target on Oct. 6, 2026. TopNews therefore presents this as a move to Accumulate from Buy, alongside a higher target.

2. Valuation multiples. The text says the stock trades at 15.0x FY28E EPS of Rs 76.5, while the estimates table puts FY28E EPS at Rs 76.6. At Rs 1,165 the multiple is about 15.2x. The printed multiples table (P/E 15.8x/15.2x/15.0x, P/BV 5.0x/4.5x/4.1x for FY26-FY28E) matches a price near Rs 1,149, not the stated CMP. TopNews has recalculated P/E and P/BV at Rs 1,165 and dropped the printed EV/EBITDA, which cannot be checked.

3. Cash flow. Investing cash flow is printed as the same Rs 1,946 crore in FY25 (outflow) and FY26 (inflow), and the FY26 lines do not add up to the reported Rs 2,254 crore fall in cash, leaving a gap of about Rs 1,600 crore.

Storm warnings

Pricing outruns AI. Price cuts from passing AI productivity savings to clients could spread faster than AI revenue grows, pushing FY27 growth below the 1% low end.

Weakness spreads. Trouble in Hi-Tech and Retail could spill into Financial Services or Manufacturing amid tariffs and the Middle East conflict.

Delayed ramp-up. A late start to the mega deal, or deeper Q3 furloughs, could push the recovery beyond FY28.

Margin floor. Wage hikes in October 2026 and January 2027, plus lower other income after the buyback, could drag margins toward 20% and put estimates at risk.

Sources

Deven Choksey Research (DRChoksey FinServ Pvt. Ltd.), Infosys Ltd. Result Update, Oct. 26, 2026; research analyst Maahir Mani. Company data as cited in the report.

Figures converted to Rs crore from the report's units. Dollar deal values converted at about Rs 89 to the dollar. The currency-drift arrows, AI mast heights, course plot, P/E and P/BV at Rs 1,165 and the 28x reference price are TopNews calculations from the report's own figures.

Disclaimer: Investments in the securities market are subject to market risks. Read all related documents carefully before investing. ThisTopNews Stock report summarises a third-party research report and is not investment advice.

Levels at a glance: Infosys · Deven Choksey Research · ACCUMULATE (from Buy) · CMP Rs 1,165 · Target Rs 1,300 · Upside ~12% · 52-week Rs 980 - 1,727 · Basis 17x FY28E EPS Rs 76.6

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