Is Now the Right Time to Buy Infosys Ahead of Q3 Results? Here’s What Motilal Oswal Says

SYNOPSIS: Motilal Oswal sees CY26 as the IT growth bottom, with Infosys well placed for an AI-led rebound through FY27-FY28, supported by strategic AI-native partnerships like Cognition’s Devin.

During Wednesday’s trading session, shares of a global leader in next-generation digital services and consulting are in focus on the stock exchanges ahead of its Q3 FY26 earnings announcement. Does the stock present a buying opportunity before the results? Here’s what Motilal Oswal has to say.

With a market cap of Rs. 6.65 lakh crores, shares of Infosys Limited were trading in the green at Rs. 1,602.7 on BSE, as against its previous closing price of Rs. 1,597.95.

The stock has delivered negative returns of over 17 percent in one year, and has fallen by around 0.3 percent in the last one month. Further, the stock is at a discount of around 19 percent from its 52-week high of Rs. 1,972 recorded on 14th January 2025, as compared to its previous closing.

Brokerage View: Growth Trough Likely in CY26

Motilal Oswal Financial Services believes CY26 could mark the bottoming of the IT growth cycle, paving the way for a stronger recovery from H2 FY27 through FY28 as AI services move from scaled deployments. Among large-cap and Tier-1 IT companies, the brokerage continues to prefer Infosys as one of the top picks, expecting a meaningful improvement in growth momentum in FY27-28. 

The domestic brokerage firm values Infosys at 26x FY28E EPS, assigning a target price of Rs. 2,150, which implies potential upside of around 35 percent from the previous closing price.

Infosys-Cognition Partnership: Strengthening AI Capabilities

Infosys recently announced a strategic collaboration with Cognition to deploy Devin, Cognition’s “AI software engineer”, across its internal engineering teams and global client engagements. The partnership integrates Devin’s autonomous development capabilities with Infosys’ Topaz Fabric, the agent-ready AI services platform. Infosys plans to deploy Devin both internally and within client environments, including as a managed service offering.

Cognition is an AI-native software company focused on building autonomous coding agents for enterprises. Its flagship product, Devin, is positioned as a full-stack AI software engineer, going beyond traditional code assistants.

More AI-Native Partnerships Likely as AI Scales

MOFSL expects 2026 to be a key inflexion year for enterprise AI adoption, with large-scale deployments beginning to take shape. While near-term demand signals across IT services remain uneven, the brokerage notes that the AI services layer is steadily forming, creating new revenue pools for Indian IT companies.

The Infosys-Cognition partnership is a strong example of this shift. By deploying Devin across delivery teams and client projects, Infosys is positioning itself early in the AI services value chain. This supports Motilal Oswal’s broader view that large language model (LLM) providers are increasingly formalising distribution through system integrators, setting the stage for a wider AI-led growth cycle from CY26 onwards.

The brokerage also believes AI-native enterprise application providers like Cognition stand to benefit from the deep client relationships and delivery scale of legacy IT service vendors. These collaborations could act as a key catalyst for revenue recovery in Indian IT services, even as traditional time-and-material coding models face gradual disruption.

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