Investing.com -- Infosys Ltd (NS:INFY) shares are expected to outperform India's broader stock index in the next two months, Morgan Stanley (NYSE:MS) said in a note.
The brokerage sees potential upgrades to the company’s fiscal 2025 revenue guidance and steady large deal momentum as key drivers.
Infosys could win $3.5-$4 billion in large deals in the third quarter, with nearly half being new business. Margins are likely to stay within the 20%-22% range this year, with an upside bias in fiscal 2026.
“The stock performed in line with the Nifty IT in 2024 and underperformed most largercap peers. If revenue growth outperforms in the coming quarters, we think it could further narrow the valuation gap relative to peers such as TCS,” analyst at Morgan Stanley wrote.
Shares have lagged behind larger peers like Tata Consultancy Services (NS:TCS) but could gain if revenue growth outpaces expectations.
The firm said there was a 60% probability to a base-case scenario of steady growth and 30% to a bullish outlook, driven by stronger IT spending.
Key risks include loss of new business, rupee appreciation, and regulatory hurdles in the U.S. Upside triggers include revenue growth exceeding guidance and a weaker rupee.