Infosys shares decline virtually 4% after Morgan Stanley downgrades inventory, cuts goal value

Infosys shares fell almost 4 % on March 12 after Morgan Stanley downgraded its score on the inventory to ‘equal-weight’ from ‘obese.’ The brokerage cited considerations over slowing progress and valuation pressures, main it to slash its goal value for Infosys to ₹1,740 from ₹2,150. This revision implies a restricted upside potential of simply 10 % from the inventory’s intraday low.

“We see draw back dangers rising for each the income progress of Indian IT companies and valuation multiples,” Morgan Stanley mentioned in its notice.

Morgan Stanley’s Outlook on Indian IT

Morgan Stanley expressed considerations concerning the broader Indian IT companies sector, noting rising draw back dangers to income progress and valuation multiples. The brokerage highlighted {that a} mixture of decrease actual and nominal GDP progress within the US, together with an ongoing expertise transition cycle, is creating headwinds for Indian IT firms. Regardless of a weakening rupee, which generally advantages IT exporters, the sector has struggled amid fears of a possible US financial slowdown and commerce coverage uncertainties. The Nifty IT index has been one of many worst-performing sectors in 2025, declining by 14 % year-to-date.

Morgan Stanley additionally steered that valuation multiples for sure shares within the sector may turn out to be extra polarized. Whereas forex actions present some help for revenue margins, the brokerage believes that valuation multiples nonetheless have room for additional draw back.

Whereas Morgan Stanley has turned cautious on Infosys, not all analysts share the bearish outlook. Final week, CLSA upgraded Infosys to ‘accumulate’ from ‘maintain,’ setting a 12-month goal value of ₹1,978.

Inventory Value Pattern

Infosys shares fell as a lot as 3.7 % to an intraday low of ₹1,578.35 on March 12. The inventory stays greater than 21 % under its 52-week excessive of ₹2,006.80, which was recorded in December 2024. Nevertheless, it has gained 16 % from its 52-week low of ₹1,359.10, registered in June 2024.

Over the previous 12 months, Infosys has added 4 %, however latest months have been difficult. In March alone, the inventory has dropped almost 6 %, following a pointy 10 % decline in February.

Infosys Q3 FY25 Efficiency

Infosys posted an 11.46 % rise in consolidated internet revenue, reaching ₹6,806 crore for Q3 FY25. Income from operations stood at ₹41,764 crore, marking a 7.58 % enhance from ₹38,821 crore in the identical quarter final 12 months. The IT large additionally raised its income steerage, supported by progress within the monetary companies and manufacturing segments.

Morgan Stanley’s Preferences in IT Sector

In its newest sector replace, Morgan Stanley said a desire for Tata Consultancy Providers (TCS) over Infosys, Tech Mahindra over HCL Applied sciences, and Coforge over Mphasis.

The brokerage maintained an ‘obese’ score on Coforge however revised its value goal down from ₹11,500 to ₹9,400. Equally, whereas maintaining an ‘obese’ stance on TCS, it lowered the goal value from ₹4,660 to ₹3,950.

HCL Applied sciences and Tech Mahindra obtained an ‘equal-weight’ score, with value targets reduce to ₹1,600 from ₹1,970 and ₹1,550 from ₹1,750, respectively.

Disclaimer: The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise buyers to test with licensed consultants earlier than taking any funding selections.