Shares of Infosys rallied on Thursday after the company’s ₹18,000-crore buyback program closed with overwhelming response. Infosys shares touched ₹1,574.40 on the BSE, gaining 1.06% as investors reacted to the oversubscription.
The buyback, which ran from November 20 to November 26, saw bids for around 82.61 crore shares against a buyback size of 10 crore shares, making it oversubscribed by 8.26 times. Infosys repurchased shares at ₹1,800 each, 15.5% above Wednesday’s closing price.
Bullish Outlook on Fundamentals and AI Adoption
Analysts remain optimistic about Infosys, citing strong fundamentals and management confidence. The company believes the ongoing wave of artificial intelligence (AI) adoption will be a long-term growth driver, despite short-term pricing and growth pressures.
Investor notes shared by Jefferies highlighted that demand remains stable, with a focus on cost-cutting IT projects rather than discretionary technology spending. Infosys has reaffirmed its leadership in AI, particularly with banking clients, although enterprises are integrating AI gradually due to required technology modernization.
Financial Performance and Cash Flow Strength
Infosys reported strong free cash flow (FCF) in FY25, reaching $3.8 billion, driven by margin expansion, efficient receivables management, and cost optimization. The company expects FCF to remain above 100% of net profit in FY26, maintaining its robust cash generation.
The IT firm has implemented Generative AI internally, improving revenue per employee and supporting margins. While utilization growth may be limited, pricing improvements and reduced third-party costs remain key margin levers.
Analyst Recommendations
Jefferies maintains a ‘Buy’ rating with a target price of ₹1,700, implying over 9% upside from the previous close. Prashanth Tapse, Senior VP at Mehta Equities, suggests a hold-and-accumulate-on-dips approach, citing Infosys’ strong balance sheet and consistent cash generation. However, near-term growth may remain constrained due to subdued global IT spending, cautious client budgets, and slower decision cycles.
Stock Performance and Technical Outlook
Infosys has gained 4% in the past month and 2% over three months, though it is down 19% in one year. Over the last five years, the stock has delivered a 42% gain.
From a technical perspective, Infosys is holding above the breakout point of ₹1,539, signaling strong institutional participation. Immediate resistance levels are ₹1,624 and ₹1,698. Analysts suggest that as long as the stock remains above the breakout, the upward trend remains intact.
At 12:30 PM, Infosys was trading at ₹1,563.75 on the BSE, up 0.39%.