Infosys Set for 19% Rally? Nuvama Raises Target to ₹1,900 on Strong Q3 Show

Summary: Brokerage firm Nuvama Institutional Equities has retained its ‘Buy’ call on Infosys, citing improved growth visibility and a robust deal pipeline. The firm sees the stock hitting ₹1,900, driven by a recovery in the banking vertical and mega deal ramp-ups.

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New Delhi: The gloom surrounding the Indian IT sector seems to be lifting, at least for Infosys. Following a resilient performance in the third quarter of FY26, domestic brokerage Nuvama Institutional Equities has turned decidedly bullish on the stock, predicting a potential 19% upside.

Nuvama has raised its target price for the IT bellwether to ₹1,900 (up from ₹1,800), reaffirming its 'Buy' rating. The brokerage cites "improved visibility" on growth, backed by consecutive quarters of strong deal wins and a recovering banking sector.

The Trigger: Guidance Upgrade

While the headline profit numbers were impacted by a one-time charge, the real story for analysts was the guidance. Infosys management raised its FY26 revenue growth guidance to 3.0% - 3.5% in constant currency terms, up from the previous band of 2% - 3%.

This confidence stems from a healthy deal pipeline. The company reported a Total Contract Value (TCV) of $4.8 billion for the quarter, with a staggering 57% coming from net new deals.

Q3 Financial Highlights: The Fine Print

• Revenue: The company posted a consolidated revenue of ₹45,479 crore, marking an 8.9% YoY jump. On a sequential basis, revenue grew 0.6% in constant currency, defying the seasonal weakness typically seen in Q3.
• Profit Under Pressure: Net profit dipped 2.2% YoY to ₹6,654 crore. However, this was largely due to a one-time exceptional charge of ₹1,290 crore related to the impact of new labor codes.
• Margins Expand: Adjusted EBIT margins expanded by 20 basis points sequentially to 21.2%, aided by currency tailwinds and the company's "Project Maximus" cost-optimization program.

Sector Watch: Healthcare & BFS Lead the Way

Nuvama highlighted a sharp divergence in sector performance, which is helping Infosys weather the macro storm better than some peers.

• Healthcare: This vertical was the star performer, surging 13% QoQ, driven largely by the ramp-up of a massive deal with the UK's National Health Service (NHS).
• BFSI Recovery: The Banking, Financial Services, and Insurance (BFSI) sector—often the biggest drag in recent quarters—showed signs of life, growing 2.3% QoQ. Analysts attribute this to a release in discretionary spending and recent deal wins.
• The Laggards: Manufacturing and Retail/CPG segments remained soft, weighed down by global tariff uncertainties.

Tl:Dr: Infosys is distinguishing itself from its peers. While TCS reported a 14% drop in profit amid weakness, Infosys has managed to protect its growth engine through aggressive deal wins (like the $4.8 bn TCV). The upward revision in guidance is a massive confidence booster for the street. If the US macro environment stabilizes, Infosys is well-positioned to lead the Nifty IT rally in 2026.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies,. We advise investors to check with certified experts before taking any investment decisions.

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