Infosys (INFO IN) – Q4FY26 Result Update – Conservative outlook misaligns deal TCV – BUY
Published on 24 Apr 2026
The revenue growth performance (-1.2% CC QoQ) was below our estimates (-0.6% QoQ CC), attributed to seasonality and slower deal ramp ups. Geo-political conflicts and AI deflationary impact pose incremental risk to FY27E growth, which is reflected in the organic revenue guidance (1.5%-3.5% CC). However, the number of large deals wins at 96 (including 3 mega deals) and NN large deal TCV at USD8.2b (+24% YoY) are encouraging, which appears to have misaligned to growth anticipation in FY27E. The guidance is factoring-in around ~75-100bps impact of planned ramp down with a European client and right-shoring impact of ~40-50bps, otherwise each of these would have contributed additionally to FY27E growth. The management re-iterated BFSI and ER&U to contribute substantially to the topline on the back of notable large wins (80% NN ER&U) in each of these verticals. On margins, we are keeping a tight band due to company’s higher appetite for investments in S&M and hiring/re-skilling AI talents, which partly get offset by project Maximus. We are baking CC organic revenue growth of 3.3% in FY27E which translates to overall CC growth of 5.0%/6.3% CC YoY in FY27E/FY28E, respectively, while keeping our margins largely unchanged. We assign PE of 18x (20x earlier) to FY28 EPS with a TP of Rs. 1,570. Retain BUY.
