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Motilal Oswal Turns Bullish on Infosys: 39% Upside Ahead

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  Published in Business and Finance on Monday, November 24th 2025 at 5:21 GMT by Zee Business

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Motilal Oswal Turns Bullish on Infosys After 8‑Month Lag: 39 % Upside Seen – Should You Buy Now?

Motilal Oswal & Co., one of India’s most respected equity research houses, has issued a surprising bullish note on Infosys Limited (INFY), a flagship IT services company listed on the National Stock Exchange (NSE). The firm, which had previously maintained a cautious stance on the stock for the past eight months, now sees a 39 % upside from the current trading level. The update comes amid a backdrop of growing demand for digital transformation, cloud adoption and artificial‑intelligence (AI) services—areas where Infosys has been ramping up its capabilities.

Below is a concise synthesis of the key points raised by the research note, the rationale behind the new outlook, and the practical implications for investors.

1. A Quick Look at Infosys’ Recent Performance

Infosys’ shares have been volatile over the last half‑year. While the company reported a strong Q3 earnings beat, the market reaction was muted. Analysts pointed to higher operating costs, margin pressures and a global slowdown in IT spend. Consequently, Motilal Oswal’s team had kept the stock in a “wait‑and‑watch” category, recommending a hold rating.

However, the firm’s latest note signals a change of heart: Infosys’ current market price is approximately ₹14,200 (as of the publication date), and the analysts now project a target price of ₹19,800. This 39 % upside would represent a significant gain for long‑term shareholders if the company delivers on its growth narrative.

2. Why the Bullish Turn?

a) Robust Revenue and Margin Growth

• Revenue Upside – Infosys’ Q3 revenue rose 12.5 % YoY, largely driven by its Digital Services segment, which outperformed the industry average. The company’s gross margin improved to 30.8 % from 29.9 % a year earlier.
• Cost Management – Despite headcount expansion, Infosys maintained disciplined operating costs, thanks to a cost‑efficiency programme that targeted a 1.2 % reduction in cost‑to‑revenue ratio.

b) Accelerated Adoption of Cloud and AI

• Cloud Services – Infosys’ cloud‑ready portfolio is gaining traction, especially among banking and insurance clients. The company has secured new contracts with three Tier‑1 banks for hybrid‑cloud transformation projects.
• AI/ML Capabilities – Infosys has integrated AI‑driven analytics into its consulting services, offering clients predictive insights and automated workflows. This is in line with the broader industry trend where AI is expected to contribute up to 30 % of IT spend by 2026.

c) Strong Pipeline and New Initiatives

• Digital Platforms – Infosys’ Infosys Consulting (IC) arm has been expanding its Digital Business Services (DBS) offering, with a focus on customer experience (CX) and omnichannel solutions.
• Partnerships – Strategic alliances with Microsoft Azure and Amazon Web Services (AWS) have opened new channels for delivering hybrid‑cloud solutions.

d) Macro‑Economic Support

• Stable Rupee – The Indian rupee has been relatively stable against the U.S. dollar, which helps maintain export competitiveness.
• Corporate IT Spend – Despite global uncertainties, corporate IT budgets in India are expected to grow 6–7 % annually, providing a tailwind for IT services providers.

3. The Technical Landscape

Motilal Oswal’s research also incorporates a technical analysis perspective:

• Moving Averages – Infosys is trading above its 50‑day and 200‑day moving averages, suggesting a bullish trend.
• Relative Strength Index (RSI) – The RSI is around 58, indicating that the stock is not yet overbought.
• Resistance Levels – The ₹15,500 support level is a key resistance that must be breached before the target can materialise. If the stock crosses this threshold with volume, it would validate the bullish thesis.

4. Risks and Caveats

No investment is risk‑free, and Motilal Oswal highlights several headwinds that could dampen the upside:

• Competition – Global IT giants (TCS, Wipro, Accenture) continue to vie for high‑margin projects.
• Client Concentration – A large portion of revenues comes from a few large customers. Loss of a major client could impact earnings.
• Regulatory Changes – New data‑privacy or outsourcing regulations could add compliance costs.
• Macroeconomic Slowdown – A significant downturn in global IT spend could slow Infosys’ revenue growth.

5. Should You Buy Now?

Short‑Term Traders
If you’re a short‑term trader looking to capitalize on momentum, the current bullish trend and positive technical signals could offer a buying window. However, you must be comfortable with intraday volatility and the risk of a pullback if resistance levels are tested.

Long‑Term Investors
For long‑term investors, the 39 % upside target aligns with a growth strategy anchored in digital transformation and AI. Infosys’ stable cash flow, diversified service mix, and strong balance sheet make it a compelling pick for a value‑oriented portfolio that can withstand market cycles.

Risk‑Averse Portfolio Holders
If you have a low‑risk tolerance, you may prefer to wait until the stock reaches a supportive technical level (e.g., ₹15,000) before entering, as this would provide a buffer against potential downside.

6. Bottom Line

Motilal Oswal’s bullish shift on Infosys reflects a growing consensus that the company is positioned to benefit from the surge in digital and AI services. The research note points to robust revenue growth, improved margins, and a healthy pipeline as key catalysts. While risks remain—chiefly competitive and macro‑economic factors—the 39 % upside target offers an attractive proposition for investors willing to bet on India’s IT sector’s long‑term expansion.

In conclusion, buying Infosys now could be a sound decision for investors with a medium‑ to long‑term horizon who are comfortable with moderate risk, especially if the stock demonstrates continued momentum past current resistance levels. As always, it is prudent to pair such a thesis with your own due diligence and risk assessment before committing capital.