Infosys shares to be in focus tomorrow after Q3 results. Should you buy, sell or hold the large-cap IT stock?

Infosys share price will be in focus on Friday after the IT major reported its Q3 results. The Indian stock market is closed for a holiday on Thursday and trading will resume from Friday.

Infosys’ American Depositary Receipts (ADR) jumped over 10% on NYSE on Wednesday, January 14, after the company raised its constant-currency revenue growth outlook for FY26. Infosys ADR ended 10.45% higher at $19.35.

India’s second largest IT services exporter, Infosys reported a net profit of ₹6,654 crore in the third quarter of FY26, registering a fall of 9.6% from ₹7,364 crore in the previous quarter.

The company’s revenue in Q3FY26 rose 2.2% to ₹45,479 crore from ₹ ₹44,490 crore, quarter-on-quarter (QoQ). Revenue in dollar terms increased 0.5% to $5,099 million from $5,076 million. In constant currency terms, Infosys posted revenue growth of 0.6% sequentially, and 1.7% year-on-year (YoY).

At the operational level, EBIT during the December quarter rose 1.3% to ₹9,479 crore from ₹9,353 crore, while EBIT margin weakened by 20 basis points (bps) to 20.8% from 21%, QoQ.

Infosys raised its FY26 revenue growth guidance to 3.0% - 3.5% in constant currency terms from 2% - 3%, and reiterated its operating margin outlook of 20% - 22% for FY26.

Infosys delivered a mixed operating performance in Q3, with beat on revenue estimates albeit margin missing expectations, according to Dipeshkumar Mehta, Senior Research Analyst at Emkay Global Financial Services Ltd.

“Revenue grew 0.6% CC QoQ. Adjusted EBIT margin declined by 20bps QoQ to 20.8%, missing our estimate. Large-deal TCV in Q3 was strong at $4.8 billion, of which 57% is net new. The management expects BFSI and EURS to see acceleration in revenue growth in FY27 over FY26, on the back of healthy deal wins and AI partner status with 15 of the top-25 clients in each of these verticals,” said Mehta.

He noted that the raised guidance does not include any revenue from the Telstra JV pending closure, and reflects elevated uncertainty at the lower end, albeit a better macro scenario at the upper end.

Should you buy Infosys shares after Q3 results?

Infosys reported a steady quarter amid a cautious demand environment, supported by strong deal activity and client interest in AI-led transformation, according to Centrum Broking.

“The outlook remains positive with continued traction in select verticals such as BFSI. It is seeing growing adoption of AI services across industry verticals driving deal pipeline. While macro and regulatory uncertainties persist, strong large-deal wins, margin discipline, and stable hiring trends position the company well for sustained growth in near term,” said the brokerage house.

Centrum Broking expects Infosys’ revenue, EBITDA and PAT to clock a CAGR of 9.2%, 10.3%, 10.2% over FY25-FY28E. It revised FY26E, FY27E and FY28E EPS estimates by -1.6%%, 1.8% and 1.0%.

The brokerage firm maintained a ‘Buy’ rating on Infosys shares and raised the target price to ₹2,076 from ₹1,951 earlier.

Emkay Global tweaked FY26-28E EPS estimates by -2.1% to 0.5%, factoring in the Q3 performance. It retained a ‘Buy’ call and Infosys share price target of ₹1,750 apiece, at 22x December 2027E EPS.

On Wednesday, Infosys share price ended 0.07% higher at ₹1,599.05 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.