# Infosys (INFY)

Sector: IT services & consulting

| Field | Value |
|---|---|
| Price | $12.24 |
| Fair value (Analysts) | $14.10 |
| Discount to fair value | 13.2% |
| Fair value uncertainty (Analysts) | Medium |
| Economic moat (Analysts) | Narrow |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.79 |
| Data as of | 2026-10-16 |
| Next earnings | 2026-10-23 (estimate) |

## In short

The market fears that AI will lower demand for Infosys's IT services and watches US immigration actions, and growth within guidance with steady margins can close the gap over four to six quarters.

## Themes and gap

- Themes: AI disruption risk (ai-disruption), Regulation and courts (regulation-legal)
- Gap type: Can close (closable)
- Why: The Q2 fiscal 2027 report on October 23, 2026, and the fiscal 2028 guidance in April 2027 show whether growth holds against AI pressure.

## About

Infosys is an Indian IT services and consulting company based in Bengaluru. It builds, runs and modernizes software and IT systems for large companies, mostly in North America and Europe, in sectors such as financial services, retail, communications, energy, manufacturing and life sciences. Most of its engineers work in India, and it also has offices and delivery centers in the United States, Europe and other regions. It sells AI services under the Infosys Topaz name and cloud services under the Infosys Cobalt name, and it owns Finacle, a banking software product. Revenue was $20,158 million in fiscal 2026, which ended on March 31, 2026, and $5,082 million in Q1 fiscal 2027. Its American depositary shares trade on the New York Stock Exchange, and each represents one share.

## Thesis

The market prices Infosys for slow growth and for the fear that AI tools will lower the amount of IT services work that clients buy. Revenue grew 2.4% in constant currency in Q1 fiscal 2027, and in July 2026 Infosys cut the top of its fiscal 2027 revenue growth guidance to 1.5% to 3.0%, from 1.5% to 3.5%. Investors fear that AI can do part of the coding, testing and support work that Indian IT firms sell. US immigration rules add risk: on October 9, 2026, the US Department of Labor suspended new and pending permanent labor certification applications for some companies, including Infosys. Infosys said that it does not expect a material impact. Its results are steady: the operating margin was 21.1%, large deal wins were $3.6 billion, and AI work was 8.2% of revenue in Q1 fiscal 2027. For the gap to close, three things must be true. Revenue growth must stay within the 1.5% to 3.0% guidance and then rise, as large deals turn into revenue. The operating margin must stay within the 20% to 22% guidance. The labor certification suspension and other US immigration actions must not limit how Infosys staffs its US projects. The Q2 fiscal 2027 report, expected on October 23, 2026, and the fiscal 2028 guidance in April 2027 are the main tests. If they pass, the gap can close over the next four to six quarters. The main reason it may not close is a lasting fall in demand for traditional IT services because of AI.

## Checkpoints

- Oct 23, 2026 (estimate): Q2 fiscal 2027 results: growth and guidance. Status: Pending. Watch: Revenue growth guidance of 1.5% to 3.0% kept or raised, an operating margin within 20% to 22% and strong large deal wins pass; another guidance cut fails.
- Apr 2027 (estimate): Fiscal 2027 results and the fiscal 2028 guidance. Status: Pending. Watch: Fiscal 2028 revenue growth guidance above the fiscal 2027 result with a steady margin passes; lower growth guidance fails.

## Balance sheet

- Cash: $3.1B
- Debt: $0.0M
- Net cash: $3.1B

Infosys has no material borrowings and holds a large amount of cash. At June 30, 2026, cash and cash equivalents were $2,287 million and current investments were $837 million. Total assets were $16,359 million and total equity was $9,674 million. Total liabilities were $6,685 million, mostly trade payables, employee obligations, unearned revenue and other operating liabilities, with $563 million of non-current lease liabilities. Free cash flow was $955 million in Q1 fiscal 2027 and $3,733 million in fiscal 2026.

As of 2026-06-30.

Sources:

- https://www.sec.gov/Archives/edgar/data/1067491/000106749126000034/exv99w02.htm
- https://www.sec.gov/Archives/edgar/data/1067491/000106749126000018/exv99w01.htm
- https://www.sec.gov/Archives/edgar/data/1067491/000106749126000040/exv99w01.htm

## Recent events

- 2026-10-10: Infosys said that the US Department of Labor suspended new and pending applications by some companies, including Infosys, under the Permanent Labor Certification program. Infosys said that it does not expect a material impact and that it will work with the government agencies on their questions.
- 2026-07-23: Infosys reported Q1 fiscal 2027 results. Revenue rose 2.4% in constant currency to $5,082 million, the operating margin was 21.1% and basic EPS was $0.20. Large deal wins were $3.6 billion, with 61% net new, and free cash flow was $955 million. AI revenue was 8.2% of the total. Infosys cut its fiscal 2027 revenue growth guidance to 1.5% to 3.0% in constant currency and kept its operating margin guidance of 20% to 22%.
- 2026-04-23: Infosys reported fiscal 2026 results. Revenue was $20,158 million, up 3.1% in constant currency, and free cash flow was $3,733 million. Large deal wins were $14.9 billion. It guided fiscal 2027 revenue growth of 1.5% to 3.5% and an operating margin of 20% to 22%.

## Risks

- High: AI tools can automate part of software development, testing and IT support. Clients can buy less work from IT services firms, or they can ask for lower prices.
- Medium: Many Infosys projects in the United States depend on visas and work permits. The US Department of Labor suspended Infosys's permanent labor certification applications in October 2026. More restrictions or higher visa costs can raise costs or delay projects.
- Medium: Clients in the United States and Europe can cut discretionary IT spending when their economies weaken. Revenue growth was in the low single digits in fiscal 2026 and Q1 fiscal 2027.
- Low: Infosys reports in US dollars but has most of its costs in Indian rupees. Changes in exchange rates can move margins.

## Links

- Page: https://picks.kamadorueda.com/company/INFY/
- History of changes: https://picks.kamadorueda.com/company/INFY/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/INFY.json

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