Rs 8,600 Crore Selloff! Infosys: The Most Sold Stock by Mutual Funds in December—Is It Time for a U-Turn?
Mutual funds took a significant step back from Infosys in December, making it the most sold stock of the month with outflows estimated at Rs 8,600 crore. Despite this selloff, better-than-expected Q3 results and an increased growth forecast are rekindling investor interest in the IT giant.
Key Highlights
– December Selloff: A total of Rs 8,624 crore worth of Infosys shares were offloaded by mutual funds during December. Notable contributors to this trend included ICICI Prudential AMC, Aditya Birla Sun Life AMC, and DSP. This decision followed a 14% decline in 2025.
– Positive Q3 Performance: Infosys reported a revenue of $5.1 billion, reflecting a 0.6% quarter-on-quarter growth in constant currency (CC) terms—surpassing market expectations.
– Upgraded Growth Guidance: The company has raised its FY26 constant currency revenue growth forecast to 3–3.5%, up from the previous estimate of 2–3%, enhancing visibility for the March quarter and improving expectations for FY27.
Analyst Sentiments
– Motilal Oswal’s Outlook: The brokerage raised its target price to Rs 2,200, maintaining a Buy rating. They anticipate a growth acceleration to over 6% year-on-year in organic constant currency for FY27, suggesting a possible mid-2026 inflection point for AI service spending.
– Jefferies’ Cautious Optimism: Analyst Akshat Agarwal noted that while the higher growth guidance aligns with Q3 performance, it does not necessarily indicate a stronger Q4. Jefferies adjusted its estimates up to 1% and increased the target price to Rs 1,880, projecting 7.5% recurring earnings-per-share growth over FY26-28.
– Nuvama’s High-Visibility Prediction: Nuvama further elevated its target to Rs 1,900, emphasizing the company’s strong deal wins and growth trajectory.
– Axis Securities’ Caution: While they recommended a buy rating with a target of Rs 1,820, they warned that current growth patterns indicate stability rather than improvement.
Conclusions
Infosys is at a crucial juncture, balancing between a hefty selloff and positive growth prospects. The improved management outlook suggests a stabilization for large-cap IT stocks that investors have been closely monitoring after an extended period of uncertainty. As the market digests these developments, investors are left to ponder whether now might be the right time for a strategic U-turn on Infosys.
(Disclaimer: The recommendations, suggestions, views, and opinions provided by the experts are their own and do not represent the views of The Economic Times.)