Investment website — Infosys Ltd (NS:) shares are expected to outperform the broader Indian equity index in the next two months. Morgan Stanley (NYSE:) said in a note.
The brokerage sees potential upgrades to the company's fiscal 2025 revenue guidance and steady momentum for large deals as the key drivers.
Infosys could win major deals worth between $3.5 billion and $4 billion in the third quarter, about half of which is new business. Margins are likely to remain in the 20% to 22% range this year, with an upward bias in FY2026.
“The stock has performed in line with Nifty IT in 2024 and the stock has underperformed most of its larger cap peers. If revenue growth outperforms in the coming quarters, we believe it could narrow the valuation gap further compared to peers like TCS.”
Shares have lagged behind larger peers such as… Tata Consultancy Services (NS:) But it could gain if revenue growth exceeds expectations.
The company said there was a 60% probability of a base case scenario of steady growth and a 30% probability of an upside outlook, driven by strong IT spending.
Key risks include loss of new business, rupee appreciation, and regulatory hurdles in the US. Upside catalysts include revenue growth above guidance and a weaker rupee.
