Investing.com — Infosys Ltd (NS:) shares are expected to outperform India’s broader stock index over 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 in large deals as key drivers.
Infosys could win $3.5-4 billion in large deals in the third quarter, almost half of which would be new business. Margins are likely to remain within the 20%-22% range this year, with an upward trend in fiscal 2026.
“The stock was in line with Nifty IT in 2024 and underperformed most larger market cap peers. If revenue growth outperforms in the coming quarters, we think this could further narrow the valuation gap with peers such as TCS,” a Morgan Stanley analyst wrote.
Shares lagged behind larger competitors such as Tata consulting services (NS:) but could gain if revenue growth exceeds expectations.
The company said there is a 60% probability of a stable growth base case scenario and a 30% chance of a bullish outlook, driven by higher IT spending.
Key risks include loss of new business, rupee appreciation and regulatory hurdles in the US. Growth triggers include revenue growth exceeding guidance and a weaker rupee.
