Infosys shares crash 4% - Should investors buy, sell, hold this IT stock after Q2 results? Experts decode | Target price

Infosys shares crashed nearly 4% in morning trade on the BSE on Monday, 26 October, after the IT major reported its September quarter (Q2FY27) results. Infosys share price opened at ₹1,119.05 against its previous close of ₹1,154.50 and declined 3.9% to an intraday low of ₹1,109.70.

Infosys reported a net profit of ₹7,823 crore in Q2FY27, up 6.23% year--on-year. The company’s net revenue from operations stood at ₹49,244 crore in Q2FY27 against ₹44,490 crore reported in the year-ago period.

Revenue growth stood at 1.2% on a sequential basis (in constant currency terms), whereas 1.5% on an annual basis (in CC terms).

Infosys shares have been under pressure for the last several years. BSE data shows, the stock is down 33% over the last five years, compared to a 19% gain in the Sensex.

Over the last three years, the stock is down 16% compared to a 16% gain in the equity benchmark Sensex.

Year-to-date, the stock is down 30%, while the Sensex has lost 14%.

Brokerage firm ICICI Securities has maintained a "reduce" call on the stock but increased the target price to ₹1,030 from ₹940 earlier.

ICICI Securities highlighted that Infosys cut its organic revenue guidance to -0.2% at mid-point (from earlier 0.55%) YoY CC for FY27 due to softer-than-expected volumes in the first half of FY27, pricing pressure from higher competitive intensity, and subdued discretionary spends.

"While management is optimistic on FY28 revenue growth led by high net new deal TCV, and seven-year mega deal of $2 billion to contribute nearly 1% to revenue in FY28, the leakages in existing book of business remain unpredictable," said ICICI Securities.

"Revenue growth is likely to be flat in FY27 despite net new TCV growth of 24% YoY in FY26. We trim our revenue growth estimates," said ICICI Securities.

On the other hand, JM Financial has an "add" view on the stock. The brokerage firm has raised the target price to ₹1,215 from ₹1,130 earlier.

"A net-new $2bn+ mega deal is expected to contribute 1%+ revenue growth in FY28, with a margin profile similar to historical deals. We revise FY27–FY29 EPS estimates by 0–1% and target multiple to 15 times (14x earlier) given sector re-rating," said JM Financial.

On the technical front, Infosys had been in a downtrend which has now changed to sideways after an impulsive recovery from ₹980.40.

According to Aditya Thukral, founder and analyst at AT Research and Risk Managers, a 5-wave impulsive structure is interrupted by a 3-wave corrective structure, and the stock seems to be forming that on shorter time frames.

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"The stock is now sustaining above 20-day, 50-day and 100-day EMAs which is positive for short and medium term. Even though we have witnessed a correction of 50% from all-time highs, the fall is corrective in nature," said Thukral.

"However, the larger correction could still take the shape of a double three corrective structure, which could drag prices further lower. Even if that has to happen, a corrective rise should emerge from current levels towards ₹1,400- ₹1,500 levels. As the recent move has been impulsive, a 50% to 61.8% retracement should provide a buying opportunity in the stock," said Thukral.

According to Vipin Kumar, AVP-Research at Globe Capital Market, Infosys has been consolidating in a wide range ( ₹980– ₹1,200 spot) for the past five months.

"On Friday, 23 October, it witnessed some profit-taking near the upper resistance band of ₹1,200. A decisive break above ₹1,200 would be a positive development, potentially leading to a sustainable move toward ₹1,350– ₹1,400 in the near term. Strong support remains around the ₹980 spot level," said Kumar.

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