INFY Stock Today, January 16: Shares Jump on FY26 Guidance Hike
Infosys share price surged over 5% today, January 16, after the company raised FY26 constant-currency revenue growth guidance to 3.0–3.5%. Robust large-deal wins of $4.8 billion and strong cash generation supported the move, even as profit dipped modestly year on year. Investor focus turned to signs of improving BFSI discretionary spending and clearer visibility on deal ramps. With sentiment improving, INFY drew interest from domestic funds and retail investors looking for stable IT exposure in India.
Why shares popped today
Infosys lifted its FY26 constant-currency revenue growth guidance to 3.0–3.5%, pointing to better deal conversion and improved client spending visibility. The update reduced fears of a long demand slowdown and fueled a rally in Infosys share price. Broker commentary turned supportive as investors priced in a softer landing in key markets. Details are covered by Times of India source.
The company reported large-deal TCV of $4.8 billion, signaling steady pipeline health and better revenue visibility. Strong cash flows added confidence on dividends and buybacks, key supports for Infosys share price during macro uncertainty. While management stayed cautious on near-term volatility, they highlighted steady execution and healthy client engagement. The Hindu noted sequential growth momentum in Q3 source.
What the latest quarter signals
Infosys posted 0.6% sequential growth in constant currency in Q3, helped by stable execution and deal ramps. Large-deal activity remained resilient, which should translate into revenue over the next few quarters. Despite a modest year-on-year profit decline, management commentary suggested stabilizing demand. For investors tracking Infosys share price, the sequential uptick matters more than yearly base effects in a transition phase.
Management pointed to green shoots in BFSI discretionary projects, a key vertical for the company. Many clients are moving from cost take-out to selective build programs, which can lift utilization and pricing mix. That shift, if sustained, can support margin resilience and the FY26 growth band. It also lowers downside risks for INFY stock if macro data stays constructive.
Valuation, quality, and risks to track
Quality remains a core pillar: ROE is about 29.7% and ROIC near 27%. Net debt is negative and interest coverage is above 80x, indicating strong financial flexibility. Operating cash flow per share is healthy, and dividend yield is roughly 2.5% on trailing numbers. These supports help cushion Infosys share price during global slowdowns and fund investments in AI-led solutions.
On trailing numbers, the stock trades near 24x earnings and above 8x book, reflecting its premium quality and steady cash generation. Street views are mixed, with more Holds than Buys in recent tallies, implying balanced expectations. Our system grade is B+ with a Buy bias, backed by growth, quality, and deal momentum. Next earnings is slated for 16 April 2026.
Key risks include slower client decision cycles, deal-ramp timing, and pricing pressure in vendor consolidation. A weaker US or Europe macro could delay discretionary projects. Watch conversion of the $4.8 billion TCV into revenue, margin levers, and any changes to Infosys guidance. These factors will likely drive INFY stock performance into FY26.
Near-term trading setup
Short-term indicators show a strong underlying trend with neutral momentum. RSI sits near 50, which is neither overbought nor oversold, while ADX above 50 signals trend strength. This mix suggests pullbacks could be shallow if volumes hold. For traders, that backdrop is constructive for Infosys share price in the near term.
Sustained delivery against the new FY26 growth band, steady large-deal ramp-ups, and healthy cash conversion can keep buyers engaged. Higher delivery visibility in BFSI and stable commentary on discretionary budgets would help. We would also track volume expansion on up days and management updates on deal pipeline quality to validate upside moves in INFY stock.
Final Thoughts
We see three takeaways today. First, a higher FY26 constant-currency growth band of 3.0–3.5% points to improving demand visibility. Second, $4.8 billion in large-deal TCV and strong cash flows support dividends and execution confidence. Third, early signs of BFSI discretionary recovery reduce downside risk. For investors, the setup favors staying allocated while tracking deal-to-revenue conversion, margin discipline, and any updates to Infosys guidance. Traders can lean on the strong trend but should watch volumes around news flow. If execution stays on track, Infosys share price can hold gains into FY26.
FAQs
Why did Infosys share price jump today?
Infosys raised its FY26 constant-currency growth guidance to 3.0–3.5% and reported $4.8 billion in large-deal TCV, signaling improving demand and better visibility. Strong cash flows added confidence on payouts. Supportive commentary from brokers also helped, lifting sentiment for INFY stock on January 16.
What should investors watch after Infosys Q3 results?
Focus on conversion of large-deal TCV into revenue, margin levers, and any updates to Infosys guidance. Track BFSI discretionary spending trends and client decision cycles. Also watch commentary on pricing, utilization, and deal ramp timing, as these will influence earnings delivery and Infosys share price.
Is Infosys valuation reasonable after the rally?
On trailing metrics, the stock trades near 24x earnings with a roughly 2.5% dividend yield and strong returns on equity. That is a quality premium. Whether it is reasonable depends on execution against the FY26 growth band and the pace of deal ramps supporting revenue and margins.
What are the key risks to INFY stock now?
Slower client decision-making, delayed deal ramps, or pricing pressure can weigh on growth. A weaker US or Europe macro could hit discretionary budgets, especially in BFSI. Any cut to Infosys guidance would be negative. Monitor cash conversion, margins, and management commentary for early signals.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
