Infosys shares declined 2.19% on Monday, contributing to broader market weakness as the Sensex fell 401.21 points (0.52%) to 76,863.30 and Nifty dropped 143.10 points (0.59%) to 24,032.55. The decline came amid renewed US-Iran tensions and rising crude oil prices, with Brent crude rising to around $90 per barrel after fresh US strikes on Iranian targets. Despite the market pressure, brokerage firm Nomura maintains a positive outlook with a 'buy' rating and target price of ₹1,290 per share, indicating an upside potential of 12.7% from the previous close of ₹1,144. The stock is currently trading at ₹1,127, down 1.5% from earlier lows, though it remains 31% lower year-to-date.
As reported by CNBC TV18, Infosys' AI services are demonstrating strong growth momentum, increasing from 5.5% of overall topline in Q3 FY2026 to 8.2% in Q1 FY2027. The company's CFO highlighted significant AI opportunities, stating that AI services opportunities could reach a size of $300 billion - $400 billion by 2030. This growth trajectory aligns with the broader AI services market expansion, as reported by Nomura. The positive analyst sentiment, particularly from Nomura's target price of ₹1,290, suggests confidence in the company's AI strategy and growth prospects despite the recent market volatility.
According to Nomura's analysis reported by CNBC TV18, the Infosys CFO re-emphasized six value pools that the company believes will create meaningful demand in the medium to long-term. These include AI strategy and engineering (including agent building and orchestration), data for AI (enterprise data readiness without sharing data broadly with foundation models), process AI (agent-led process reimagination, with customer service cited as a major wedge), legacy modernisation (AI-enabled acceleration), physical AI (AI embedded into devices, edge, autonomous systems), and AI trust (security, responsible AI and compliance). The CFO believes that rising tech complexity in enterprises makes the role of system integrators like Infosys more relevant, given its deep understanding of clients' processes and context.
The broader IT sector faced pressure with Nifty IT declining 1.70%, while Nifty MidSmall IT & Telecom fell 1.26%. Among major Nifty losers, Adani Enterprises led the decline at 3.02%, followed by Hindalco Industries down 2.51% and Bajaj Finance slipping 2.22%. However, some stocks showed resilience with HDFC Bank rising 1.15% after brokerages retained bullish stance despite MD and CEO Sashidhar Jagdishan's decision not to seek reappointment. Coal India gained 0.97% and Bajaj Auto rose 0.80%. According to HST Wealth's Hariselvan Radhakrishnan, the quarterly MSCI index rejig is expected to trigger sizeable passive fund flows, with Reliance Industries likely to face the largest outflow as its index weight is reduced. The upcoming India Q1 GDP data will offer fresh insight into economic growth resilience amid geopolitical tensions and higher energy costs.
