Why Is Anand Rathi Recommending Infosys and Can IT Growth Surprise in FY27?
About Infosys
🔹 Infosys is one of India’s largest IT services companies, offering consulting, digital transformation, cloud, and engineering services to global enterprises.
🔹 The company has a strong presence across BFSI, retail, manufacturing, telecom, and public sector clients.
🔹 Infosys is widely regarded as a bellwether for India’s IT services sector due to its scale, margins, and global client base.
Brokerage interest in Infosys has picked up again after a period of muted sentiment for IT stocks. Anand Rathi’s recommendation reflects improving confidence in deal momentum, management guidance, and the company’s positioning in next-generation technologies such as artificial intelligence.
Q3 Performance Snapshot
🔹 Quarterly revenue growth stood at 0.6%, indicating early signs of stabilization.
🔹 Large deal Total Contract Value reached $4.8 billion, up sharply by 92% year-on-year.
🔹 Strong deal wins provide multi-year revenue visibility.
While near-term revenue growth remains modest, the sharp jump in large deal wins is significant. In IT services, deal wins typically translate into revenue with a lag, making current order inflows a leading indicator for future growth.
Guidance Upgrade: A Key Signal
🔹 Infosys raised FY26 revenue growth guidance to 3%–3.5%.
🔹 Management expects better growth momentum in FY27.
🔹 Margin discipline remains a focus amid pricing pressure.
Guidance upgrades are closely tracked by investors, especially in a cautious global environment. The revised outlook suggests management confidence in deal execution and gradual recovery in client spending.
For traders tracking IT stocks during volatile phases, structured market approaches such as Nifty Tip and BankNifty Tip are often used to align exposure with broader market trends.
Gen-AI and Digital Strategy
🔹 Strategic platforms like Cognition and Topaz Fabric strengthen Infosys’ AI-led offerings.
🔹 Management has identified six value pools of Gen-AI opportunities.
🔹 AI adoption is expected to drive deal wins, productivity, and margin resilience.
Artificial intelligence is increasingly becoming a differentiator rather than an optional add-on. Infosys’ early investments in AI platforms position it well to capture enterprise spending as clients look to automate, optimize costs, and enhance customer experiences.
Why Anand Rathi Is Constructive
🔹 Strong rebound in large deal wins.
🔹 Improved growth visibility into FY27.
🔹 Clear strategic focus on Gen-AI monetisation.
Anand Rathi’s recommendation reflects the view that the worst phase of demand uncertainty may be behind for large IT companies. Infosys, with its scale and balance sheet strength, is seen as a relative beneficiary if global tech spending stabilizes.
Risks to Monitor
🔹 Delays in client decision-making due to global macro uncertainty.
🔹 Pricing pressure and deal ramp-up timelines.
🔹 Currency movements impacting reported revenues.
Despite improving indicators, IT stocks remain sensitive to global economic conditions. Investors should balance optimism around deal wins with execution risks and external macro factors.
Investor Takeaway: Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes Infosys is entering a phase where deal momentum and AI-led differentiation could drive medium-term growth. While near-term numbers remain measured, the upgrade in guidance and strong order inflows provide comfort for patient investors. Those tracking sectoral trends can follow structured market insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Infosys and IT Stocks
🔹 Why are brokerages turning positive on Infosys?
🔹 How important are large deal wins for IT companies?
🔹 Can Gen-AI materially impact IT sector growth?
🔹 Is FY27 likely to be better for Indian IT services?
🔹 What risks should IT investors watch closely?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
