Infosys down 3% today; should you buy this stock ahead of Q4 results on April 17?

IT stocks fell on Tuesday, led by Infosys Ltd, amid concerns over weakening IT demand ahead of Trump tariffs. The deterioration in the macro environment will weigh on March quarter results and FY26 guidance, IT analysts warned.

The key question that needs answer is whether the current uncertainty will defer or derail the recovery. At this stage, the JM Financial is leaning towards the 'defer' argument. "Until the clarity emerges, we advise sticking to players with valuation comfort (TCS/Infosys) and earnings visibility (TCS, Tech Mahindra). Mid-caps, with growth momentum and recent correction, offer healthy upside," the brokerage said. JM has a Buy rating on Infosys and a target price of Rs 1,820. 

Kotak Institutional Equities, which sees Infosys guiding for 1-4 per cent growth in FY26, said the new financial year could end up similar to FY2025 or even lower in growth terms. It sees incumbents such as Infosys, TCS, Wipro and Tech Mahindra to report weak numbers in Q4. 

"The 20 per cent correction in the IT index from peak captures the concerns. Assuming a no-recession scenario, there are upsides in plenty of stocks. Long-term revenue growth implied in the stock price stands at 5-7 per cent for many large companies, reasonable in our view. Infosys, TCS, TechM, Coforge and Indegene are our key picks. The key risk to our call is recession in the US economy — such a scenario could weigh on multiples," Kotak said.

Emkay Global has suggested a 'Buy' rating on the Infosys stock with a target price of Rs 1,900. It expects Infosys' dollar revenue to fall 1.5 per cent sequentially in Q4 after factoring in 50 bps cross currency headwinds. EBIT margin is expected to decline 80 bps sequentially owing to wage hike. All eyes would be on FY26 guidance. Emkay Global expects the It major to guide to 3-6 per cent CC YoY revenue growth and 20-22 per cent EBIT margin.

In the case of management commentary, investors would eye Calendar 2025 technology budget and spending behaviour by clients amid increased macro uncertainties; any change in project ramp-up, deferment, cancellation trend with tariff uncertainties; and demand environment in BFSI, Hitech, Manufacturing, Retail, and
Communications. 

Kotak expects large deal TCV for TCS to come in at $3 billion in Q4, a decline on YoY basis. The focus will be on average contract value (ACV) of deal wins, it said.