Shares of Infosys rose 5% on Friday after the Indian IT major unexpectedly raised its revenue growth forecast for fiscal 2026, signalling a potential turnaround for India’s $283 billion information technology sector amid rising AI-driven deal activity.
The stock led gains on the Nifty 50 index and recorded its strongest intraday rise in four months, while the Nifty IT sub-index climbed 2.2%.
Infosys now expects revenue to grow between 3% and 3.5% in the financial year ending March 31, 2026, up from its earlier guidance of 2% to 3%.
Analysts said the improved outlook reflects stronger deal momentum, particularly from artificial intelligence-led partnerships. Morningstar noted that Infosys’ strategy of vendor consolidation is improving growth prospects, while its expanding AI library is helping the firm increase account sizes during contract renewals.
“Infosys is in a better competitive position compared with other Indian IT consulting firms due to its comprehensive AI offerings,” Morningstar said.
The company secured AI-focused deals with Adobe and Siemens in 2025, although it did not disclose revenue generated from AI services. Its order book for deals valued above $50 million climbed to a two-year high of $4.8 billion.
Following the earnings update, at least three brokerages, including Jefferies, raised their price targets on the stock.
Infosys’ outlook also points to stable discretionary technology spending and continued strength in its core financial services segment, which accounts for nearly one-third of its revenue. Sales from the segment rose 3.9% during the quarter.
The upbeat forecast follows comments from rival Tata Consultancy Services earlier in the week, which flagged strong demand for 2026 on the back of AI adoption. TCS shares rose 1.6% after posting quarterly revenue slightly above estimates.
Meanwhile, Wipro shares climbed 3.2% ahead of the release of its quarterly earnings later on Friday.