Infosys received a maintained Hold rating from ICICI Securities with a target price of ₹1,630 following the IT services company's Q3FY26 financial results. The brokerage's assessment comes after the company delivered mixed quarterly performance with revenue beating expectations marginally while margins fell short of estimates.

Q3FY26 Performance Overview

The company's third quarter results showed a nuanced performance against analyst expectations. While Infosys managed to achieve a marginal beat on revenue projections, the margin performance disappointed when excluding a one-off benefit from property sale.

Revised Growth Projections

ICICI Securities has updated its revenue growth forecasts for Infosys, expressing increased confidence in the company's medium-term prospects. The brokerage now models higher growth rates for the upcoming fiscal years, citing two key drivers for improved performance.

Key Growth Drivers

The brokerage identifies strong order book momentum as a primary catalyst for future growth, with the order book expanding 30% YoY in 9MFY25. Additionally, ICICI Securities highlights an uptick in AI-led discretionary demand across multiple industries, with particular strength observed in financial services, energy, resources and utilities sectors.

A notable shift in hiring patterns has emerged, with total headcount growing 4.2% YoY, surpassing the TTM revenue growth of 3.3% YoY in constant currency terms. This represents a marked change from previous quarters where headcount growth lagged behind revenue expansion, indicating improved growth visibility for the company.

Valuation and Target Price

ICICI Securities maintains its target price of ₹1,630 based on a one-year forward price-to-earnings ratio of 21x on December 2027 estimated earnings per share of ₹78.00. The brokerage notes that EPS estimates remain largely unchanged despite the revised revenue growth projections, supporting the continued Hold recommendation for investors.

Indian equity markets sustained their upward momentum in afternoon trade on Friday, with both benchmark indices maintaining steady gains as IT stocks continued their rally following Infosys's upbeat revenue guidance. The sustained buying momentum reflects strong investor confidence despite ongoing foreign institutional selling pressure.

Current Market Performance

The afternoon session showed consistent gains across both major indices:

Both indices opened positively, with the Sensex starting at 83,670.79 against its previous close of 83,382.71, while the Nifty opened at 25,696.05 compared to its previous close of 25,665.60.

IT Stocks Drive Market Gains

IT stocks continued to lead the market rally, building on morning session momentum after Infosys raised its revenue guidance:

Infosys emerged as the top performer on the Nifty 50, extending its gains from the morning session when the company's decision to raise its FY26 revenue guidance from 2%-3% to 3%-3.5% boosted sector sentiment.

Mixed Performance Across Stocks

While IT stocks dominated the gainers, some sectors showed weakness:

Maruti Suzuki also declined 1.63% to ₹15,889.00, reflecting mixed sentiment across different sectors.

Sectoral and Broader Market Trends

Sectoral performance showed positive momentum in key indices:

Market breadth remained positive with 2,066 stocks advancing against 1,958 declines on the BSE, where 4,241 stocks were traded. A total of 75 stocks hit 52-week highs, while 190 touched 52-week lows.

Institutional Activity and Market Dynamics

Despite the positive market performance, foreign institutional investors continued their selling pressure:

The sustained buying by domestic institutional investors helped offset foreign selling pressure, contributing to the market's resilience and continued upward momentum in the afternoon session.