Citi retains its Neutral rating on Infosys with a target price of ₹1,965, following insights from a recent management meet. The company remains cautiously optimistic about improving demand trends, particularly in the U.S. financial services sector.
Key takeaways from the meeting include:
- Improving discretionary spending: Infosys observes pockets of recovery in discretionary spending, particularly in areas like card payments, capital markets, and mortgages.
- Deal drivers: Cost optimization projects continue to dominate deal flows, but compliance and digital transformation initiatives are also contributing significantly.
- Financial services recovery: The sector, which was the first to slow down, is showing signs of recovery. Infosys expects other sectors to follow this trajectory over time.
- IT budget trends: Clarity on IT budgets will emerge in January-February as clients begin outlining their plans for the year, though responsiveness to macroeconomic conditions continues to evolve.
Infosys remains focused on adapting to changing client needs, leveraging both optimization projects and innovation-driven deals.
