Infosys (INFY) AI Stock Analysis

• Market Cap: $71.53B
• Dividend Yield: 3.04%
• Average Volume (3M): 14.39M
• Price to Earnings (P/E): 21.6
• Beta (1Y): 0.73
• Revenue Growth: 4.52%
• EPS Growth: -0.22%
• Country: US
• Employees: 300,000
• Sector: Technology
• Sector Strength: 98
• Industry: Information Technology Services
• EPS (TTM): 0.19
• Shares Outstanding: 4,154,272,500
• 10 Day Avg. Volume: 15,863,689
• 30 Day Avg. Volume: 14,394,888
• PEG Ratio: -6.09
• Price to Book (P/B): 6.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.35
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 1.93
• Enterprise Value/Gross Profit: 21.15
• Enterprise Value/Ebitda: 7.10
• 1Y Price Target: $19.54
• Price Target Upside: 16.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 75 Outperform
• Price Target: $20.00 ▲(19.62%Upside)

Infosys' strong financial performance and positive earnings call, highlighted by significant deal wins and advancements in AI, are major strengths. However, technical indicators point to weak momentum, and valuation metrics suggest the stock might be overvalued. These factors combined result in a moderately positive outlook.

Positive Factors

BFSI Segment

INFY is poised to benefit from a recovery in the BFSI segment led by an uptick in discretionary spending, with 28% of its revenue in the segment.

Financial Performance

INFY delivered a better than feared print with healthy relative growth & improved large deal bookings.

Market Share

Infosys has significantly expanded its global market share in IT services over the past 12 years, going from 0.8% in 2012 to approximately 3.5% in 2023.

Negative Factors

Demand Environment

Management characterized the demand environment as remaining challenging, with tariffs and geopolitical issues driving elongated deal cycles and slower demand for discretionary projects.

Economic Environment

A weakening economic environment will have a negative impact on IT services growth and demand.

Revenue Guidance

Infosys's guidance for FY26 was below expectations, reflecting concerns about a weakening economic environment.

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 generates revenue primarily through its IT services and consulting offerings. The company's revenue model is driven by providing end-to-end business solutions, which include systems integration, enterprise application services, cloud services, and digital transformation projects. Key revenue streams include long-term contracts with clients for application development and maintenance, as well as consulting services. Infosys also earns from business process management services, which optimize and automate clients' business processes. The company has significant partnerships with major technology firms like Microsoft, Oracle, and SAP, which enhance its service offerings and contribute to its earnings. Additionally, Infosys invests in innovation through its Infosys Innovation Fund and partnerships with startups, which help bolster its technological capabilities and market reach.

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: Negative
• Last Price: 16.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 16.72 is below the 20-day moving average (MA) of 18.06, below the 50-day MA of 18.20, and below the 200-day MA of 19.80, indicating a bearish trend. The MACD of -0.36 indicates Positive momentum. The RSI at 28.36 is Positive, neither overbought nor oversold. The STOCH value of 4.01 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
ACN	77 Outperform	$173.71B	22.20	27.27%	2.22%	6.21%	14.87%
INFY	75 Outperform	$71.53B	21.62	30.46%	3.04%	4.52%	-0.22%
CTSH	74 Outperform	$35.37B	14.57	16.69%	1.70%	6.34%	12.16%
WIT	71 Outperform	$29.68B	20.48	16.50%	3.04%	-1.95%	62.75%
Sector *	68 Neutral	€7.73B	17.01	8.79%	1.72%	6.44%	5.76%
FIS	68 Neutral	$42.88B	51.06	5.25%	1.91%	-9.12%	―
IBM	67 Neutral	$244.44B	42.56	22.73%	2.64%	2.69%	-31.73%