Infosys Ltd.

Overview Key strengths Key risks Robust business position with large recurring revenue and healthy deal wins. Slower revenue growth amid lower information technology (IT) spending and budget constraints because of macroeconomic headwinds. Good profitability, given high utilization rates and access to offshore resources. Exposure to foreign-exchange fluctuations, given significant presence in international markets. Strong operating cash flow, low capital spending, and prudent financial policies with zero debt. Smaller scale than major IT service players. We estimate Infosys? revenue will grow 3.0% in fiscal 2025 (year ending March 31, 2025), and 4.1% in fiscal 2026, compared with 1.9% in fiscal 2024. This will be mainly driven by deal wins in fiscal 2024 with the company ending the fiscal year with a

...Discretionary IT spending will remain soft over the next 12-18 months. We estimate Infosys' revenue will grow 3.0% in fiscal 2025 (year ending March 31, 2025), and 4.1% in fiscal 2026, compared with 1.9% in fiscal 2024. This will be mainly driven by deal wins in fiscal 2024 with the company ending the fiscal year with a total contract value of US$17.7billion. While we expect growth in segments such as retail and hi-tech to remain muted due to persistent cost pressures and delays in decision-making, other segments such as financial services and manufacturing will likely recover as adoption of artificial intelligence (AI) increases. Investments in AI are growing considerably, albeit from a low base, and are likely to consume an increasing share of allocated IT budgets. We expect worldwide AI spending to increase to 6.7%...

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