Infosys buyback ends with 8.26 times bids. Should you buy or sell the large-cap IT stock?

Infosys share price traded higher on Thursday after the company’s ₹18,000 crore worth buyback programme window closed and received stellar bids. Infosys shares gained as much as 1.06% to ₹1,574.40 apiece on the BSE.

Infosys buyback opened on November 20 and the window closed on November 26. According to the BSE data, shareholders submitted bids for around 82.61 crore shares as against the Infosys share buyback size of 10 crore equity shares. Thus, Infosys buyback offer was oversubscribed by about 8.26 times.

The IT major has repurchased 10 crore equity shares at ₹1,800 apiece. Infosys buyback price was 15.5% higher than its closing price on Wednesday, November 26, the last day of buyback offer.

Analysts remain bullish on Infosys shares, led by improving fundamentals, and strong management outlook. Infosys expects the current wave of artificial intelligence (AI) adoption to be a net positive over the long term even as it dampens growth and pricing in the near term.

According to investor meeting takeaways shared by Jefferies, the IT major indicated that the overall demand environment remains stable but continues to be skewed towards cost-takeout deals rather than discretionary technology spending.

AI adoption gradual, not a “big bang”

Infosys reiterated that it is strongly positioned in AI, citing leadership in industry rankings and strong presence in banking clients. However, enterprises are rolling out AI at a slower-than-expected pace.

According to the company, this is partly because while point solutions / PoCs work well individually, outcomes are below expectations when these are integrated together. Unlike previous technology cycles where little preparatory work was required, enterprises need to modernize their technology stack to realize the full benefit of AI.

Infosys said many clients are deferring such investments partly due to weak macro and partly because of the unclear path to return on investment (ROI).

Demand Environment Steady

Infosys highlighted that the demand environment has remained steady and has not worsened, though focus on cost-takeouts remains, with limited appetite for discretionary IT spends, as per the brokerage report. Deal win trajectory is strong with BFSI vertical being the key growth driver, while manufacturing vertical has also fared better than management expectations.

While Infosys has delivered strong growth in H1FY26, the company has not raised the upper end of its revenue growth guidance of 3% as discretionary IT spends remain under pressure, and lower third-party items. Management highlighted that growth in cost of third-party items may be lower QoQ in Q2FY26 versus Q3FY25.

Infosys highlighted that its implementation of GenAI in internal operations has helped Infosys improve its Revenue/Employee which in turn is supporting margins. While utilization may not improve much from here, Infosys sees pricing improvements and lower third-party costs as other margin levers, according to the Jefferies report.

Infosys delivered its highest-ever FCF in FY25 at $3.8 billion led by improving margins, better collections and control over receivables and optimizing delivery costs. Management expects FCF to remain above 100% of net profit in FY26, continuing its strong cash generation trend.

Infosys Share Price Target

Jefferies has maintained a ‘Buy’ rating and set Infosys share price target of ₹1,700 apiece, implying an upside potential over 9% from its previous closing price.

Prashanth Tapse, Senior VP (Research), Mehta Equities said from a long-term investment perspective, Infosys appears reasonably well-positioned for a hold–with–accumulate-on-dips strategy.

“The company retains a strong balance sheet, solid client relationships, and consistent cash-generation capability. Given the ongoing weakness in global IT spending, profit growth is likely to remain measured rather than explosive. So investors should temper return expectations,” said Tapse.

However, according to him, the near-term outlook remains subdued, which is evident in the stock’s -19% return over the past year, reflecting persistent headwinds for Indian IT services, including muted discretionary tech spending, tighter client budgets, a cautious macro environment, and slower decision-making cycles across key markets.

“Until global demand conditions improve meaningfully, Infosys’ growth trajectory may remain constrained. Overall, while valuation support and buyback-led confidence provide downside protection, meaningful re-rating will likely depend on a revival in global tech spending and stronger deal-momentum over the next few quarters,” said Tapse.

Infosys share price has gained 4% in one month and just over 2% in three months. The IT stock is down 17% on a year-to-date (YTD) basis, and 19% in one year. However, Infosys share price has gained over 42% in the past five years.

Technical Outlook

Infosys share price is holding firmly above its breakout point of ₹1,539, reinforcing the strength of the recent move, noted Anshul Jain, Head of Research, Lakshmishree Investments.

“The base formation carried clear accumulative volumes, signaling steady institutional participation rather than speculative spikes. Daily moving averages are bullishly aligned and acting as a reliable launch pad, supporting the price every time it dips. With momentum intact and the structure showing no signs of fatigue, Infosys stock price is positioned for further upside,” said Jain.

The immediate targets for Infosys share price to watch are ₹1,624, followed by ₹1,698, which marks the next key resistance zone. As long as Infosys share price stays above the breakout level, the trend remains solidly upward, he added.

At 12:30 PM, Infosys share price was trading 0.39% higher at ₹1,563.75 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.