INFY – As It Was; Remain Neutral

Research evidence excerpt

INFY – As It Was; Remain Neutral

IT SERVICES

INFOSYS LIMITED May 14, 2026

No broad-based pricing irrationality observed, with volume deflation the key dynamic

to watch. Management has not seen a pattern of broad-based irrational pricing from

competitors, noting that key competitors are generally disciplined. Isolated instances exist

where competitors have won deals by taking a leap of faith on aggressive assumptions,

but management views these as one-off rather than systemic, and has walked away from

deals where terms did not meet return expectations. Importantly, management distinguishes

between pricing and volume deflation, with pricing having improved low single digits in

FY26, driven by Project Maximus and value-based selling, while deflation risk exists on

volume. FY26 growth was largely realization-driven with volumes flat, and management

acknowledged that productivity gains retained on non-T&M work will eventually be passed

back to clients at renewal or competitively, though a delta remains capturable in the

interim. On the competitive landscape more broadly, GCCs remain a net source of

opportunity despite pockets of workforce rationalization. GCCs are still growing in India and

opportunities persist for build-operate-transfer engagements, while some clients have found

their GCCs too expensive to run internally given the higher compensation required to attract

talent, leading them to outsource back to INFY.

Valuation: Remain Neutral as we continue to see relatively balanced risk / reward over

the medium term. We continue to expect large deal ramps to help buoy revenue growth

amidst a lack of rebound in discretionary demand. Shares currently trade at approximately

13x our revised FY28E EPS, below INFY’s 3-year average 2-year forward multiple. Upside