Infosys shares surge over 5% after Q3 FY26 results, lifts broader market

Shares of Infosys Ltd rallied sharply on Dalal Street on Friday after the company announced its Q3 FY26 results. The IT stock’s strong performance helped broader markets snap their recent losing streak.

Infosys shares jumped more than 5% in early trade. According to exchange data, the stock was trading around Rs 1,681.55, up Rs 82.50 or 5.16% from the previous close of Rs 1,599.05. The stock opened at Rs 1,670.30, touched an intraday high of Rs 1,683.45, and a low of Rs 1,654.55. Its 52-week high stands at Rs 1,967.75, while the 52-week low is Rs 1,307.10, as investors cheered the company’s earnings and outlook.

What drove the rally

The sharp rise in Infosys shares was primarily driven by its Q3 FY26 performance and an upgrade in guidance.

• Revenue growth beats expectations:Infosys reported constant currency revenue growth of 0.6% quarter-on-quarter, surpassing market expectations.

• Guidance upgrade:The company raised its FY26 constant currency revenue growth guidance to 3%–3.5%, up from 2%–3%. Management highlighted steady discretionary tech spending and strong momentum in its core financial services business, boosting investor confidence.

Strong deal wins

Infosys reported total contract value (TCV) of $4.8 billion from 26 deals in Q3 FY26, up sharply from $3.1 billion in the previous quarter. Around 57% of these deals were net new, indicating fresh business rather than renewals.

Robust deal activity is often viewed as an early sign of demand recovery, which contributed to the buying interest in the stock.

Brokerages remain positive

Several domestic brokerages maintained a positive stance on Infosys:

• Choice Institutional Equities:Praised the strong large-deal momentum and Infosys’ focus on six AI value areas, including AI engineering, AI-led software development, legacy modernization, and AI with physical devices. The brokerage expects stronger growth in FY27 and revised its revenue, EBIT, and PAT estimates to a CAGR of 10.2%, 11.8%, and 10.8%, respectively, for FY25–FY28E. It retained a Buy rating with a target price of Rs 1,865.

• Nuvama Institutional Equities:Highlighted solid Q3 performance and consecutive strong deal wins, which enhance growth visibility. It raised its target price to Rs 1,900 from Rs 1,800 while maintaining a Buy rating.

• Emkay Global:Called the quarter mixed, noting revenue beat estimates but margins were slightly below expectations. Emkay also mentioned that the revised guidance excludes revenue from the Telstra joint venture, pending closure. It retained a Buy rating with a target price of Rs 1,750.

What investors should consider

At current levels, the brokerage target prices imply upside potential of up to 19% from Wednesday’s close of Rs 1,599.05.

For long-term investors, Infosys’ guidance upgrade, strong deal wins, and improving demand visibility provide comfort. However, the stock has moved up sharply in a short period, and near-term volatility cannot be ruled out.

Experts generally advise against chasing the stock at elevated levels. Staggered buying or waiting for price dips is recommended, especially amid global uncertainty in technology spending. Investors should align any decisions with their risk profile and investment horizon rather than reacting to short-term price movements.