Infosys: High Cash Flow But Revenue Growth Remains A Challenge

Jun. 12, 2025 11:47 AM ETInfosys Limited (INFY) StockINFY
(8min)

Summary

  • I maintain a Hold rating on Infosys due to ongoing macroeconomic uncertainties and cautious client spending, limiting transformational project growth.
  • Revenue growth is mixed across verticals, with strength in Financial Services and Manufacturing offset by weakness elsewhere; topline growth remains sequentially lower.
  • Infosys boasts record cash flow, solid capital allocation, and minimal stock-based compensation, but faces employee retention and competitive pressures.
  • Forward guidance is cautious, with 0-3% revenue growth expected for fiscal 2026; meaningful upside depends on macro clarity and increased generative AI work.
  • Looking for more investing ideas like this one? Get them exclusively at IPO Edge. Learn More »

Infosys Headquarters in Bangalore, India

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Investment Outlook

Infosys (NYSE:INFY) provides a range of consulting and business process outsourcing services to clients worldwide.

I previously analyzed INFY in June 2024 with a Hold outlook due to a soft client spending environment.

Spending has improved

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This article was written by

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Donovan Jones is a research specialist with 15 years of experience identifying opportunities for IPOs and public software companies.

He also leads the investing group IPO Edge, which offers actionable information on growth stocks through first-look IPO filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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