Buy Infosys Ltd For Target Rs. 1,300 by Motilal Oswal Financial Services Ltd
Infosys reported 2QFY27 revenue of $5.1b, up 1.2% QoQ, with adjusted EBIT margin at 21%. FY27 revenue growth guidance lowered to 1-2% YoY in CC. Analysts cut EPS estimates, citing weaker growth and pricing pressure, but maintain a 'BUY' rating with a target price of INR1,300.
How this was made
The 30-second read
Why it matters
The guidance cut is likely to trigger a short‑term sell‑off, though the stock may find support from the announced large‑deal pipeline and AI revenue expansion.
Market read
Primary impact on Infosys stock and broader Indian IT sector; secondary effect on peers and investors tracking emerging market tech exposure.
What to watch
AI‑driven revenue growth and the large USD5.2 bn deal pipeline could offset slower organic growth if conversion improves.
Background
Infosys reported Q2 FY27 results with modest revenue growth and maintained EBIT margin guidance, but cut FY27 revenue growth outlook amid pricing pressure and the pending exit from a large Daimler contract.
Ticker impact
Infosys cut FY27 revenue growth guidance to 1-2% YoY and lowered organic growth outlook, marking the first public disclosure of the guidance downgrade.
downward pressure as investors price in slower growth and margin constraints
The article provides fresh FY27 guidance numbers and explains the impact of the Daimler deal exit, which are new and material for valuation.
Market effects
Lower growth outlook for Indian IT services may weigh on peers like TCS, HCLTech and Tech Mahindra.
Negative sentiment for Indian equity markets, especially the IT sector, as guidance falls short of expectations.
Limited; primarily affects investors with exposure to Indian tech stocks and global IT sector allocations.
Counterpoint
Buy side may argue the 13% upside target still offers value given the stock's current discount and potential upside from the new mega‑deal pipeline.
Key entities
- companyInfosys Ltd
Indian IT services firm, subject of the earnings and guidance update.
- companyDaimler AG
European automotive manufacturer; Infosys is exiting a large deal, affecting growth outlook.
