Infosys (INFY) AI Stock Analysis

• Market Cap: $67.67B
• Dividend Yield: 3.14%
• Average Volume (3M): 20.12M
• Price to Earnings (P/E): 21.2
• Beta (1Y): 0.80
• Revenue Growth: 4.52%
• EPS Growth: -0.22%
• Country: US
• Employees: 300,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.19
• Shares Outstanding: 4,154,401,400
• 10 Day Avg. Volume: 19,743,068
• 30 Day Avg. Volume: 20,121,283
• PEG Ratio: -18.42
• Price to Book (P/B): 6.74
• Price to Sales (P/S): 3.92
• P/FCF Ratio: 18.00
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 3.83
• Enterprise Value/Gross Profit: 12.58
• Enterprise Value/Ebitda: 16.36
• 1Y Price Target: $17.50
• Price Target Upside: 7.83% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 77 Outperform
• Price Target: $19.50 ▲(20.15% Upside)

Infosys' overall stock score is driven by its strong financial performance and strategic positioning in AI and cloud services, which are significant growth areas. While technical indicators suggest a cautious outlook, the company's solid fundamentals and reasonable valuation provide a balanced investment case. The mixed sentiment from the earnings call highlights both opportunities and challenges, but the company's proactive approach to innovation and client engagement is a positive sign for future prospects.

Positive Factors

Strong Financial Performance

Infosys' consistent revenue growth and robust cash flow generation highlight its strong financial health, ensuring the ability to fund growth initiatives and maintain stability.

Enterprise AI Leadership

Leadership in AI positions Infosys as a key player in the tech industry, enhancing its competitive edge and driving future growth through innovative solutions.

Geographic Growth

Strong growth in Europe indicates successful market penetration and diversification, reducing dependency on any single market and enhancing global presence.

Negative Factors

Operating Margin Decline

Declining operating margins could pressure profitability, requiring strategic cost management to maintain financial health and competitive pricing.

Increased Attrition

Rising attrition rates may impact project delivery and increase recruitment costs, affecting operational efficiency and client satisfaction.

H-1B Visa Fee Increase

Increased H-1B visa fees could raise operational costs and affect talent acquisition, challenging Infosys' ability to maintain a skilled workforce in the U.S.

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, 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. Continued vigilance on cost structures and liabilities will be essential to sustain this positive trajectory.

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.27B	19.28B	18.56B	18.21B	16.31B	13.56B
Gross Profit	5.87B	5.87B	5.47B	5.50B	5.32B	4.61B
EBITDA	4.51B	5.07B	4.97B	4.71B	4.53B	4.05B
Net Income	3.16B	3.16B	3.17B	2.98B	2.96B	2.61B
Balance Sheet
Total Assets	17.42B	17.42B	16.52B	15.31B	15.55B	14.82B
Cash, Cash Equivalents and Short-Term Investments	4.67B	4.67B	3.43B	2.32B	3.19B	3.70B
Total Debt	962.53M	962.53M	1.00B	1.01B	722.00M	728.00M
Total Liabilities	6.17B	6.17B	5.92B	6.09B	5.56B	4.32B
Stockholders Equity	11.21B	11.21B	10.56B	9.17B	9.94B	10.44B
Cash Flow
Free Cash Flow	4.15B	4.20B	2.88B	2.53B	3.06B	2.97B
Operating Cash Flow	4.42B	4.46B	3.15B	2.85B	3.35B	3.26B
Investing Cash Flow	-434.78M	-471.45M	-708.00M	-218.00M	-1.00B	-1.13B
Financing Cash Flow	-2.85B	-2.86B	-2.12B	-3.29B	-3.33B	-1.32B

Infosys Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 16.23 is below the 20-day moving average (MA) of 16.82, below the 50-day MA of 16.74, and below the 200-day MA of 18.63, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 39.58 is Neutral, neither overbought nor oversold. The STOCH value of 13.32 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	77 Outperform	$67.67B	21.17	30.46%	3.14%	4.52%	-0.22%
ACN	74 Outperform	$152.19B	20.11	24.61%	2.41%	7.36%	6.18%
CTSH	74 Outperform	$32.72B	13.61	15.93%	1.82%	6.34%	12.16%
WIT	73 Outperform	$28.45B	19.73	15.86%	3.16%	-1.95%	35.65%
IBM	72 Outperform	$267.09B	46.51	21.20%	2.32%	2.69%	-31.73%
EPAM	68 Neutral	$8.51B	21.98	10.94%	―	9.73%	-0.29%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Infosys Corporate Events

Infosys Secures SEC Exemptive Relief for Major Share Buyback

On September 12, 2025, Infosys Limited announced that it received exemptive relief from the U.S. Securities and Exchange Commission (SEC) regarding its proposal to buy back up to 10 crore fully paid-up equity shares, valued at ₹18,000 crore. This buyback is subject to shareholder approval through a special resolution and aims to align with both Indian and U.S. regulatory requirements. The announcement marks a significant step in Infosys’s strategic financial management, potentially impacting its stock market performance and shareholder value.

Infosys Announces ₹18,000 Crore Share Buyback Plan

On September 11, 2025, Infosys Limited announced that its Board of Directors approved a proposal to buy back equity shares worth ₹18,000 Crore at a price of ₹1,800 per share. This buyback represents up to 2.41% of the company’s total paid-up equity share capital and is subject to shareholder approval through a special resolution. The buyback aims to enhance shareholder value and will be conducted through a tender offer route, with the company seeking exemptive relief from the U.S. SEC due to regulatory differences between Indian and U.S. laws. The buyback committee, comprising key company officers, will oversee the process.

Infosys Board to Consider Equity Share Buyback Proposal

On September 8, 2025, Infosys Limited announced that its Board of Directors will consider a proposal for the buyback of equity shares. This move, communicated to the stock exchanges and filed with the United States Securities and Exchange Commission, could impact the company’s capital structure and shareholder value, reflecting Infosys’s strategic financial management decisions.

Infosys Updates on McCamish Cyber Incident

Infosys Limited has reported an update on the McCamish Cyber Incident as of August 5, 2025. This update was formally submitted to the United States Securities and Exchange Commission on August 6, 2025. The incident’s details were shared with stock exchanges, reflecting Infosys’ commitment to transparency and compliance. The update signifies the company’s proactive measures in addressing cybersecurity challenges, which are crucial for maintaining stakeholder trust and safeguarding its operations.

Infosys Reports Q2 2025 Financial Results

On July 23, 2025, Infosys Limited announced its financial results for the quarter ending June 30, 2025. The company disclosed its operational performance and financial condition under both International Financial Reporting Standards (IFRS) and Indian Accounting Standards (Ind-AS). This announcement is significant as it provides stakeholders with insights into the company’s financial health and operational efficiency, potentially impacting its market positioning and investor confidence.

Infosys Updates on McCamish Cyber Incident

On July 11, 2025, Infosys Limited provided an update regarding a cyber incident involving its McCamish platform. The company submitted a report to the United States Securities and Exchange Commission, detailing the incident and its implications. This update is part of Infosys’s ongoing efforts to address and manage the situation, reflecting its commitment to transparency and cybersecurity. The incident’s impact on the company’s operations and its stakeholders is being closely monitored.

Infosys Concludes 44th AGM with Key Insights

Infosys Limited held its 44th Annual General Meeting (AGM) on June 25, 2025, where the company discussed key proceedings, including the Chairman’s speech and CEO’s presentation. The AGM also covered e-voting results and the scrutinizer’s report, which were shared with stock exchanges. This event highlights Infosys’s commitment to transparency and stakeholder engagement, reinforcing its position in the IT industry.