Infosys: Improving Revenue Traction and Deal Momentum Offset by Margin Pressure and Execution Risks, Justifying a Hold Rating

William Blair analyst Maggie Nolan has maintained their neutral stance on INFY stock, giving a Hold rating on January 9.

Maggie Nolan has given his Hold rating due to a combination of factors that balance emerging positives with lingering headwinds in Infosys’s fundamentals. On the positive side, the company modestly exceeded revenue expectations, showed improving traction in pricing and productivity, and delivered a strong rebound in large deal total contract value with a notable increase in new wins. Management also raised its fiscal 2026 constant-currency revenue outlook and signaled a stronger growth exit rate for the fourth quarter, while reiterating margin guidance, and highlighted that AI-related pricing remains favorable and value-accretive.
Maggie Nolan’s rating is based on the view that these growth and demand indicators are offset by pressure on profitability and execution risk. Gross and operating margins deteriorated year-over-year and came in below consensus, with part of the weakness tied to regulatory-driven labor cost changes in India and fewer working days, which weighed on earnings per share. Additionally, volumes remain subdued despite better pricing dynamics, suggesting that the demand environment is still not fully robust. Taken together, these factors support a neutral stance: the improving revenue trajectory and deal momentum are encouraging, but margin compression and muted volume trends temper the risk/reward profile, leading to a Hold recommendation.

According to TipRanks, Nolan is a 2-star analyst with an average return of 0.3% and a 53.54% success rate. Nolan covers the Technology sector, focusing on stocks such as CSG Systems International, Cognizant, and Epam Systems.

In another report released on January 9, TD Cowen also maintained a Hold rating on the stock with a $17.00 price target.