Infosys (INFY) AI Stock Analysis

• Market Cap: $54.89B
• Dividend Yield: 2.58%
• Average Volume (3M): 17.36M
• Price to Earnings (P/E): 24.5
• Beta (1Y): 0.74
• Revenue Growth: 4.62%
• EPS Growth: 1.06%
• Country: US
• Employees: 300,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.18
• Shares Outstanding: 4,055,391,000
• 10 Day Avg. Volume: 14,604,373
• 30 Day Avg. Volume: 17,362,490
• PEG Ratio: -18.42
• Price to Book (P/B): 6.74
• Price to Sales (P/S): 3.92
• P/FCF Ratio: 18.49
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 2.66
• Enterprise Value/Gross Profit: 8.89
• Enterprise Value/Ebitda: 11.61
• 1Y Price Target: $17.97
• Price Target Upside: 35.52% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.78
• Revenue Forecast (FY): $19.68B

• Rating: 80 Outperform
• Price Target: $15.50 ▲(16.89% Upside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is driven primarily by strong financial quality (high margins, strong ROE, and low leverage) and a generally positive earnings update (raised revenue guidance, strong large-deal wins, solid free cash flow). Technicals are supportive but not strongly bullish, while valuation is the main constraint given a ~24.9 P/E with only modest growth.

Positive Factors

Sustained high profitability

Infosys’s high and stable operating and net margins reflect a scalable services model, pricing power on large transformation work, and disciplined cost structure. These margins support reinvestment, dividends and resilience through cyclical IT spending shifts over the medium term.

Very conservative balance sheet

Extremely low leverage and strong ROE give Infosys financial flexibility to invest in growth areas (cloud, AI, talent) and absorb shocks. A large equity base and low debt reduce refinancing and interest risks, supporting durable capital allocation to M&A, buybacks or capex.

Large deals and AI scale

Robust large-deal momentum plus widespread AI engagement signals structural revenue opportunity and deeper client embedment. Scale in AI projects and platform/agent builds can convert into multi-year managed services, platform monetization and higher wallet share within enterprise accounts.

Negative Factors

Decelerating revenue momentum

Revenue growth slowdown reduces leverage on fixed-costs and limits operating-leverage tailwinds. Slowing top-line expansion may pressure long-term margin expansion potential, constrain reinvestment capacity, and make sustained EPS improvement more dependent on efficiency programs.

Labor-code charge and margin drag

Regulatory-driven labor costs create a persistent, structural margin headwind. Coupled with lower utilization from large fresher intakes and higher accrued variable pay, this raises the risk that margin recovery will be slower and that productivity gains must offset new structural cost layers.

Ongoing legal and cyber disclosures

Public disclosures of cyber incidents and pending lawsuits indicate potential operational, compliance and reputational risks. These issues can lead to contract, remediation or liability costs and increased client scrutiny, creating sustained governance and risk-management demands on margins and growth.

Infosys Business Overview & Revenue Model

Company Description

Infosys Limited, together with its subsidiaries, provides consulting, technology, outsourcing, and next-generation digital services in North America, Europe, India, and internationally. It provides digital marketing and digital workplace, digital commerce, digital experience and interactions, metaverse, data analytics and AI, applied AI, generative AI, sustainability, blockchain, engineering, Internet of Things, enterprise agile DevOps, application modernization, cloud, digital process automation, digital supply chain, Microsoft business application and cloud business, service experience transformation, energy transition, cyber security, and quality engineering solutions; Oracle, SAP, and Saleforce solutions; API economy and microservices; and Topaz, an AI-first set of services, solutions, and platforms using generative AI technologies. The company's products and platforms include Finacle, a core banking solution; Edge suite of products; Panaya platform, Infosys Equinox, Infosys Helix, Infosys Applied AI, Infosys Cortex, and Stater digital platforms; and Infosys McCamish, an insurance platform. It serves aerospace and defense, agriculture, automotive, chemical manufacturing, communication, consumer packaged goods, education, engineering procurement and construction, healthcare, high technology, industrial manufacturing, information services and publishing, insurance, life science, logistics and distribution, media, entertainment, mining, oil and gas, private equity, professional, public, retail, travel, hospitality, utilities, and waste management industries. The company was formerly known as Infosys Technologies Limited and changed its name to Infosys Limited in June 2011. Infosys Limited was incorporated in 1981 and is headquartered in Bengaluru, India.

How the Company Makes Money

Infosys primarily makes money by delivering contracted technology and consulting services to enterprise clients. Its revenue model is largely services-led and is recognized based on the delivery of work under customer contracts (e.g., time-and-materials billing for effort and specialized skills, and fixed-price/project-based engagements tied to deliverables and milestones), as well as through longer-term managed services and outsourcing arrangements where Infosys runs and modernizes clients’ IT operations for recurring fees. Key revenue streams typically include: (1) Digital and transformation programs—cloud migration and modernization, data/analytics, AI-related initiatives, digital experience, and cybersecurity—often sold as multi-phase programs combining consulting, implementation, and ongoing optimization; (2) Core IT services—application development, maintenance, testing, integration, and enterprise platform services—providing steady demand from run-the-business and incremental change work; (3) Infrastructure and managed services—ongoing management of applications, platforms, and IT environments, generating recurring revenue over multi-year terms; (4) Business process and operations services—where applicable, supporting specific operational processes with technology-enabled delivery; and (5) Software/products/platform-related revenue and intellectual property-led offerings—where applicable—through licensing, subscriptions, or platform/service fees. Revenues are driven by large enterprise client relationships, multi-year outsourcing and transformation contracts, the mix of onshore/offshore delivery, utilization and pricing of skilled talent, and expansion within existing accounts. Significant earnings factors also include strategic alliances with major technology vendors and cloud providers (used to co-sell and implement platforms), partnerships with enterprise software ecosystems, and the company’s ability to deliver at scale through global delivery centers. Specific partnership terms, pricing, and customer-level contract economics are not publicly disclosed in detail and are therefore null.

Infosys Financial Statement Overview

Summary

High-quality fundamentals with strong profitability (TTM operating margin ~21.4%, net margin ~16.2%), very conservative leverage (TTM debt-to-equity ~0.07), and consistently strong ROE (~29.7% TTM). Offsets include decelerating revenue momentum, modest margin drift vs. FY2021, and a recent TTM free cash flow decline (~-8.9%).

Income Statement

INFY shows consistently strong profitability with solid TTM (Trailing-Twelve-Months) margins (gross margin ~29.8%, operating margin ~21.4%, net margin ~16.2%). Revenue has grown from ~$13.6B (FY2021) to ~$19.3B (FY2025), but growth has clearly decelerated versus earlier years and the TTM revenue growth figure appears unusually high relative to the annual trend. Margins have also drifted modestly lower from FY2021 levels, indicating some pressure on profitability despite scale.

Balance Sheet

The balance sheet is a major strength: leverage is very low (TTM debt-to-equity ~0.07; FY2025 ~0.09) and equity remains sizable (TTM ~$9.2B). Returns on equity are consistently high (~28%–33% across the period; TTM ~29.7%), indicating efficient capital use. The key watch item is the decline in stockholders’ equity from FY2025 (~$11.2B) to TTM (~$9.2B), even as profitability remained strong.

Cash Flow

Cash generation is healthy, with free cash flow closely tracking earnings (TTM free cash flow to net income ~0.93; similar in FY2024–FY2025). However, free cash flow growth turned negative in TTM (down ~8.9%) after positive growth in FY2024–FY2025, suggesting some near-term softening in cash conversion. Operating cash flow coverage is moderate rather than exceptional (TTM ~0.74; FY2025 ~0.87), which is solid but not a standout given the company’s profitability profile.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	19.85B	19.28B	18.56B	18.21B	16.31B	13.56B
Gross Profit	5.95B	5.87B	5.59B	5.50B	5.32B	4.73B
EBITDA	4.55B	5.07B	4.97B	4.71B	4.53B	4.05B
Net Income	3.21B	3.16B	3.17B	2.98B	2.96B	2.61B
Balance Sheet
Total Assets	15.95B	17.42B	16.52B	15.31B	15.55B	14.82B
Cash, Cash Equivalents and Short-Term Investments	2.98B	4.51B	3.35B	2.36B	3.23B	3.75B
Total Debt	978.64M	962.00M	1.00B	1.01B	722.00M	728.00M
Total Liabilities	6.67B	6.17B	5.92B	6.09B	5.56B	4.32B
Stockholders Equity	9.24B	11.21B	10.56B	9.17B	9.94B	10.44B
Cash Flow
Free Cash Flow	3.80B	4.09B	2.88B	2.53B	3.06B	2.97B
Operating Cash Flow	4.09B	4.35B	3.15B	2.85B	3.35B	3.26B
Investing Cash Flow	-50.26M	-361.00M	-708.00M	-218.00M	-1.00B	-1.13B
Financing Cash Flow	-4.54B	-2.88B	-2.12B	-3.29B	-3.33B	-1.32B

Infosys Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: 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 13.26 is below the 20-day moving average (MA) of 14.20, below the 50-day MA of 16.22, and below the 200-day MA of 17.00, indicating a bearish trend. The MACD of -0.74 indicates Negative momentum. The RSI at 28.74 is Positive, neither overbought nor oversold. The STOCH value of 3.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INFY.

Infosys Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	80 Outperform	$54.89B	24.55	29.68%	2.58%	4.62%	1.06%
ACN	73 Outperform	$122.64B	18.02	24.98%	2.25%	6.58%	1.19%
EPAM	70 Outperform	$7.42B	30.32	10.27%	―	14.26%	-15.49%
IBM	70 Outperform	$233.81B	26.07	36.86%	2.21%	4.51%	21.89%
CTSH	68 Neutral	$29.20B	17.90	14.84%	1.46%	7.44%	-4.57%
WIT	67 Neutral	$22.12B	21.25	15.49%	2.78%	-1.97%	48.61%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Infosys Corporate Events

Infosys Files Investor AI Day 2026 Transcript With U.S. SEC

Infosys disclosed that on February 24, 2026, it notified stock exchanges about the availability of the transcript for its Investor AI Day 2026, and has furnished this material to the U.S. Securities and Exchange Commission via a Form 6-K filing. The move formalizes access to the Investor AI Day discussion for global investors and regulators, underscoring Infosys’s ongoing engagement with the capital markets around its artificial intelligence strategy and related investor communications.

By submitting the Investor AI Day 2026 transcript as an exhibit, Infosys enhances transparency into its AI-focused presentations and commentary to shareholders. This step may help analysts and investors better assess the company’s technology roadmap and AI initiatives, potentially influencing perceptions of its competitive position in the global IT services industry.

The most recent analyst rating on (INFY) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Infosys stock, see the INFY Stock Forecast page.

Infosys Files Form 6-K Updating Markets on McCamish Cyber Incident

Infosys disclosed in a Form 6-K dated December 23, 2025, that it has provided stock exchanges with an update on a cyber incident involving its McCamish business unit, issuing a formal company statement as an exhibit to the filing. While the brief notice offers no operational or financial details, the move underscores the company’s effort to keep regulators and investors informed on cybersecurity developments, highlighting the growing materiality of cyber risks for global IT service providers and the heightened scrutiny around how such incidents are communicated to markets.

The most recent analyst rating on (INFY) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Infosys stock, see the INFY Stock Forecast page.

Infosys Files Form 6-K on Update to Lawsuits Involving Infosys McCamish Systems

On December 20, 2025, Infosys Limited notified stock exchanges that it had provided an update on lawsuits pending against its subsidiary, Infosys McCamish Systems LLC, and subsequently furnished this notification to the U.S. Securities and Exchange Commission via a Form 6-K filed on December 22, 2025. While the filing confirms the existence of ongoing litigation involving the subsidiary, it offers no substantive details on the nature, scale or potential financial impact of the lawsuits, leaving investors aware of legal exposure but without additional visibility into associated risks or implications for the company’s operations and financial position.

The most recent analyst rating on (INFY) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Infosys stock, see the INFY Stock Forecast page.

Infosys Files Form 6-K to Clarify December 19 ADR Price Volatility

On December 20, 2025, Infosys notified stock exchanges that it had issued a clarification regarding unusual volatility observed in its American Depositary Receipt (ADR) price on December 19, 2025, and has furnished this clarification to the U.S. Securities and Exchange Commission via a Form 6-K filed on December 22, 2025. By formally addressing the ADR price swings through an exchange intimation and SEC submission, Infosys is signaling attention to investor concerns and regulatory transparency, an important step for maintaining confidence among U.S. and global shareholders amid sudden movements in its U.S.-traded securities.

The most recent analyst rating on (INFY) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Infosys stock, see the INFY Stock Forecast page.