Infosys Shares Gain After Motilal Oswal Upgrade, Brokerage Sees 39% Upside on Three Key Drivers

Infosys shares were among the top gainers on Monday, November 24, after brokerage firm Motilal Oswal upgraded the stock to a “buy” and projected a strong 39% upside from current levels. The stock rose as much as 2.5% in early trade, reflecting renewed optimism around its earnings visibility, margin outlook and positioning in the global AI services landscape.

Motilal Oswal Turns Bullish After 8 Months

The brokerage had downgraded Infosys to “neutral” in March 2025, citing limited catalysts at that time. Now, after eight months, Motilal Oswal believes the overall setup has meaningfully improved, helping the stock regain its “buy” tag.

Important: Motilal Oswal said that upside risks now outweigh potential downside, offering an attractive risk-reward setup for investors.

The firm has also raised its growth estimates for Infosys for FY27 and FY28, expecting a 5.5% year-on-year growth in FY27 and 8.5% growth in FY28, supported by a clear demand recovery and stronger acceleration as global IT spending picks up.

Key Factors Behind the Upgrade

Motilal Oswal highlighted three major reasons for upgrading Infosys:

1. Enterprise shift from hardware capex to services-led spending

Enterprises worldwide are transitioning from hardware-heavy investments to services-led tech spending, especially in AI and modernization programs. This trend significantly benefits Infosys because of its discretionary-heavy portfolio, making the company a prime beneficiary as businesses scale AI adoption across systems.

2. Strong positioning with Topaz AI suite and full-stack services

Infosys’ proprietary AI stack, the Topaz suite, along with its full-stack application modernisation capabilities, is expected to gain renewed importance.
Important: Motilal Oswal believes that as enterprises accelerate modernisation and AI programs, Infosys’ broad service portfolio will come back in favour.

3. Attractive valuations relative to long-term averages

At current levels, Infosys is trading close to its 10-year average P/E multiple and at a 13% discount to its five-year average. Motilal Oswal noted that this makes the valuation compelling, particularly when paired with improving fundamentals.

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Improved Demand Visibility and Margin Support

Infosys has raised the lower end of its growth guidance in both quarters of the first half of FY26. This indicates a steady demand environment and confidence in project pipelines.

Additionally, the quality of revenue is expected to improve.
Important: Pass-through revenue is likely to be lower this year, boosting the company’s margin profile.

Efficiency gains from Project Maximus are also expected to support margins through operational improvements and better resource utilization.

Growth Forecast Raised for FY27 and FY28

Motilal Oswal now expects Infosys to deliver robust performance over the next two years:

• FY27 growth forecast: 5.5% YoY

• FY28 growth forecast: 8.5% YoY

The acceleration in 2028 is particularly tied to a broader global demand recovery and sustained shift toward digital and AI transformation initiatives.

Broader Analyst Sentiment Favourable

Infosys enjoys wide analyst coverage. Out of 51 analysts:

• 37 rate the stock as “buy”

• 12 recommend “hold”

• 2 suggest “sell”

This reflects a generally positive long-term outlook for the IT major.

Infosys Share Price Today

As of the latest update, Infosys shares were trading 2.1% higher at ₹1,577. Despite today’s gains, the stock remains down 16% year-to-date, leaving room for recovery if the anticipated demand revival plays out.

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