Infosys shares fall 3% after Morgan Stanley downgrades, cuts target price

Shares of Infosys fell over 3% on Wednesday after Morgan Stanley downgraded its rating to 'equal-weight' from 'overweight,' citing concerns over slowing growth and valuation pressures. The brokerage also slashed its target price for the stock to Rs 1,740 from Rs 2,150.

"We see downside risks emerging for both the revenue growth of Indian IT services and valuation multiples," Morgan Stanley analysts wrote.

Despite a weakening rupee, Indian IT stocks have struggled this year, weighed down by concerns over a potential U.S. economic slowdown and uncertainty surrounding trade policies. The Nifty IT index, one of the worst-performing sectors after real estate, has fallen 14% in 2025, marking a rare weak year for the sector.


North America remains a crucial market for Infosys, contributing over 60% of its revenue in FY24. As business sentiment weakens, investors are closely watching the broader demand outlook for Indian IT services.

However, not all analysts are bearish on the stock. Last week, CLSA upgraded Infosys to 'accumulate' from 'hold,' with a 12-month target price of Rs 1,978. According to Trendlyne data, among 40 analysts tracking the stock, 28 have a 'buy' rating, with the consensus target price at Rs 2,097, implying a 26% upside from Tuesday’s close.

Infosys shares have gained 3.81% over the past year but have fallen 11.41% in the last month, including a 1.58% drop in the past week.

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