Infosys share price gains despite reporting 12% YoY decline in net profit; Should you buy, sell or hold?

Infosys shares jumped 3 per cent to hit an intraday high of ₹1,462.20 on the BSE on Monday, despite the IT giant reporting a 12 per cent year-on-year decline in consolidated net profit for the March quarter, posting ₹7,033 crore compared to ₹7,969 crore in the corresponding period last year.

Infosys share price have gained over 2.22 per cent in past five trading session. The scrip has, however, descended 21.56 per cent in last six months.

Revenue for Q4FY25 increased by 8% year-on-year, reaching ₹40,925 crore compared to ₹37,923 crore in the same quarter last year. However, revenue growth in constant currency (CC) terms was 4.8% year-on-year, while the topline saw a decline of 3.5% quarter-on-quarter (QoQ) in CC terms.

Commenting on the Q4 earnings, CEO and MD Salil Parekh said, “Our performance for the year has been robust in terms of revenues, expansion in operating margins, and the highest-ever free cash generation. Our depth in AI, cloud and digital, and strength in cost efficiency, automation, and consolidation position us well for the needs of our clients.”

“Infosys reported revenue of ₹40,925 crore, growing 7.9% YoY (4.8% in constant currency), with an operating margin of 21%. Despite a 3.5% QoQ revenue dip and 11.8% YoY EPS decline, free cash flow rose 10% YoY to ₹7,737 crore. Backed by strong performance in AI, cloud, and efficiency projects, the company proposed a ₹22 final dividend and guided FY26 revenue growth of 0–3% in constant currency. Infosys offers innovation-driven potential with AI and R&D initiatives but may see slower momentum soon,” said Seema Srivastava, Senior Research Analyst at SMC Global Securities.

Should you buy or sell or hold Infosys stock?

Brokerage firm Choice Broking has assigned ‘add’ rating with a target price of ₹1,580. “We expect Revenue/ EBIT/ PAT to grow at a CAGR of 4.4%/ 4.7%/ 5.5% over FY25-27E and revise our rating to ‘ADD’ with a downward revised target price of INR 1,580 implying a PE of 22x (maintained) on FY27E EPS of INR71.8,” it said.

The brokerage firm further added, “This cautious outlook reflects ongoing macroeconomic uncertainties, particularly concerning tariffs and rising debt affecting client spending. Although the company has not yet faced delays in ramping up recent deal wins, clients are beginning to feel initial pressures. As a result, we anticipate a slowdown in discretionary spending, with a shift toward cost efficiency, vendor consolidation, and cost-reduction deals. Tariff policies are also expected to impact key verticals such as Manufacturing, Consumer, and Communications.”

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.