Infosys (INFY) AI Stock Analysis

• Market Cap: $70.93B
• Dividend Yield: 2.99%
• Average Volume (3M): 18.63M
• Price to Earnings (P/E): 22.0
• Beta (1Y): 0.78
• Revenue Growth: 4.52%
• EPS Growth: -0.22%
• Country: US
• Employees: 300,000
• Sector: Technology
• Sector Strength: 85
• Industry: Information Technology Services
• EPS (TTM): 0.19
• Shares Outstanding: 4,154,392,000
• 10 Day Avg. Volume: 18,551,491
• 30 Day Avg. Volume: 18,629,625
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 3.83
• Enterprise Value/Gross Profit: 12.58
• Enterprise Value/Ebitda: 16.36
• 1Y Price Target: $18.28
• Price Target Upside: 7.78% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 79 Outperform
• Price Target: $19.50 ▲(14.98% Upside)

Infosys demonstrates strong financial performance with consistent revenue growth and robust cash flow management, which significantly contributes to its overall score. The earnings call highlighted both strengths in AI leadership and challenges in operating margins and client spending. Technical analysis indicates mixed signals, while valuation remains fair. The absence of notable corporate events means the focus remains on financial and operational performance.

Positive Factors

Strategic Collaboration

The collaboration with Mastercard enhances Infosys' offerings in financial services, leveraging Mastercard Move's capabilities. This partnership strengthens Infosys' market position in the financial sector, providing long-term growth opportunities through expanded service capabilities and client reach.

Cash Flow Management

Infosys' strong cash flow management ensures liquidity and the ability to fund growth initiatives. The significant increase in free cash flow highlights efficient operations and financial stability, supporting long-term investments and shareholder returns.

Enterprise AI Leadership

Infosys' leadership in enterprise AI positions it as a key player in the growing AI market. This capability enhances its competitive advantage, driving innovation and attracting clients seeking advanced AI solutions, which supports sustainable revenue growth.

Negative Factors

Operating Margin Decline

The decline in operating margins indicates potential challenges in cost management and pricing power. Sustained margin pressure could impact profitability and limit the company's ability to invest in growth and innovation over the long term.

Increased Attrition

Rising attrition rates can lead to increased recruitment and training costs, potentially disrupting project delivery and client relationships. High turnover may affect Infosys' ability to maintain service quality and innovation, impacting long-term competitiveness.

Cautious Client Spending

Cautious client spending amid geopolitical uncertainties can lead to delayed projects and reduced revenue growth. This environment challenges Infosys to adapt its strategies to maintain client engagement and secure new business, affecting future growth prospects.

Infosys Business Overview & Revenue Model

Company Description

Infosys (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 Money

Infosys 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 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.

Income Statement

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

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

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.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.28B	18.56B	18.21B	16.31B	13.56B
Gross Profit	5.87B	5.47B	5.50B	5.32B	4.73B
EBITDA	5.07B	4.97B	4.71B	4.53B	4.05B
Net Income	3.16B	3.17B	2.98B	2.96B	2.61B
Balance Sheet
Total Assets	17.42B	16.52B	15.31B	15.55B	14.82B
Cash, Cash Equivalents and Short-Term Investments	4.67B	3.43B	2.32B	3.47B	3.75B
Total Debt	962.53M	1.00B	1.01B	722.00M	728.00M
Total Liabilities	6.17B	5.92B	6.09B	5.56B	4.32B
Stockholders Equity	11.21B	10.56B	9.17B	9.94B	10.44B
Cash Flow
Free Cash Flow	4.20B	2.88B	2.53B	3.06B	2.97B
Operating Cash Flow	4.46B	3.15B	2.85B	3.35B	3.26B
Investing Cash Flow	-471.45M	-708.00M	-218.00M	-1.00B	-1.13B
Financing Cash Flow	-2.86B	-2.12B	-3.29B	-3.33B	-1.32B

Infosys Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 16.96
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INFY, the sentiment is Neutral. The current price of 16.96 is above the 20-day moving average (MA) of 16.90, below the 50-day MA of 17.22, and below the 200-day MA of 19.07, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 50.70 is Neutral, neither overbought nor oversold. The STOCH value of 74.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for INFY.

Infosys Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	79 Outperform	$70.93B	21.96	30.46%	2.99%	4.52%	-0.22%
CTSH	74 Outperform	$34.46B	14.04	16.69%	1.78%	6.34%	12.16%
IBM	72 Outperform	$239.41B	41.69	22.73%	2.64%	2.69%	-31.73%
ACN	70 Outperform	$152.07B	19.43	27.27%	2.48%	6.21%	14.87%
WIT	69 Neutral	$30.08B	21.16	16.50%	2.99%	-1.95%	35.65%
EPAM	68 Neutral	$8.79B	22.26	11.36%	―	9.73%	-0.29%
Sector *	61 Neutral	$36.69B	12.42	-10.20%	1.85%	8.50%	-7.32%