Infosys shares climbed 5% on Friday following an unexpected increase in its revenue forecast for the fiscal year ending March 31, 2026. The company now expects revenue growth of 3% to 3.5%, up from a previous projection of 2% to 3%.
The stock led gains on the Nifty 50 index, marking its strongest intraday rise in four months and pushing the Nifty IT sub-index 2.2% higher.
Morningstar noted that Infosys's push for vendor consolidation is improving growth prospects, while its AI library is strengthening its position as clients expand account sizes during renewals. "Infosys is in a better competitive position compared with other Indian IT consulting firms due to its comprehensive AI offerings," the brokerage added.
Infosys has secured AI-led deals with Adobe and Siemens AG in 2025, though it has not disclosed its AI revenue. The company's order book for deals above $50 million reached $4.8 billion, a two-year high.
At least three brokerages, including Jefferies, raised their target price after the results were announced.
The updated outlook suggests steady discretionary tech spending and momentum in Infosys's core financial services business. This comes two days after rival Tata Consultancy Services indicated strong demand for 2026.
Revenue from the financial services segment, which makes up nearly one-third of Infosys's sales, increased 3.9% during the quarter.
Earlier this week, TCS reported third-quarter revenue slightly above estimates, attributed to AI-driven demand, with its shares up 1.6% on the day. Wipro, set to report quarterly earnings later on Friday, saw its shares rise 3.2%.