---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 177710
conversation_id: 9bba3acd-5828-4494-899f-9c320ec1671f
citations: 0
created: 2026-05-31 18:45:41Z
---

# Is CLSA incrementally more positive/negative on Infosys. If so, why?

**Yes — CLSA is incrementally MORE POSITIVE on Infosys.** Over the latest c.6-week window in CLSA's RMS archive (mid-May to late-June 2025), the desk has made an active portfolio upgrade, explicitly elevated INFY to top-pick status, and flagged a near-term positive catalyst on guidance. Rating remains **O-PF (Outperform)** with a **target of Rs 1,861** (~+14–17% upside from spot at the time of publication) [4][6].

**Note on the corpus**: latest CLSA notes in the workspace are dated 29-Jun-2025. "Incremental" here means versus prior CLSA stance evident in the same corpus (early-2025 portfolio held TCS over Infosys; TCS was the larger-cap IT preference).

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### Why CLSA has turned incrementally more positive

**1. Portfolio action — INFY added, TCS removed (16 May 2025)**
In its 16-May weekly wrap, CLSA's India strategy team explicitly **"replaced TCS with Infosys and added Tech Mahindra to the portfolio"** [1]. This is the clearest signal of an incremental shift — CLSA's flagship India focus portfolio (which has beaten the Nifty in 15 of 17 quarters since inception in Jan-2021) actively swapped large-cap IT exposure from TCS to Infosys [1]. The portfolio also expressed a preference for **"staples, energy, real estate and IT over materials, industrials and healthcare"** [1].

**2. Promoted to "Top Pick" (20 June 2025)**
In the Accenture 3Q25 read-across, CLSA writes: *"We reiterate our positive stance on India's IT sector with **Infosys (INFY), Tech Mahindra (TechM) and Persistent Systems (PSYS) our top picks** and O-PF or HC O-PF ratings on all our coverage except LTIM"* [3]. INFY is named first among the three top picks across all India IT large-caps.

**3. Near-term positive catalyst flagged — possible FY26 guidance upgrade (18 June 2025)**
The 1QFY26 commentary preview note explicitly highlights INFY-specific upside: *"…Infosys (INFY) too, on account of the **closure of two acquisitions which could lift its FY26 revenue growth guidance**"* [2]. The same note positions INFY among the top picks: *"INFY, Tech Mahindra (TechM) and Persistent Systems (PSYS) remain our top picks. We have a Hold rating only for LTIMindtree (LTIM)"* [5].

**4. Market-share-gain narrative on Gen AI**
CLSA's INFY meeting notes flag a competitive-positioning positive: *"Pricing pressure due to Gen AI/automation is happening but there is no margin pressure. **INFY is trying to pass on more benefits to the clients over market and hence gaining market share.**"* [6]. Layered with: *"**Legacy modernization is happening much more easily due to Gen AI particularly for banks. This is a new volume opportunity for IT vendors like Infosys.**"* [6] — directly linking Gen AI from a perceived threat into an INFY-specific volume tailwind in BFSI (the largest vertical, also flagged as the most resilient).

**5. Sentiment / positioning tailwind**
From the 10-Jun US NDR feedback: *"Majority of EM focused investors we met are **underweight Indian IT**, with **INFY being the most held name across majority of the funds**"* [7]. CLSA argues this underweight stance *"implies potential for more capital allocation in case demand commentary improves in coming months"* [7] — meaning INFY is the most natural recipient of any catch-up inflow when sentiment turns.

**6. Sector-level V-shaped recovery thesis still intact**
The 18-Jun preview note also says BFSI sees *"continued momentum and has been more resilient"*, with legacy modernization flagged specifically by INFY as a new revenue opportunity [8]. CLSA reiterates *"Strong order bookings this quarter should bode well for recurring revenue in the future"* and a *"V-shaped recovery in coming quarters while valuations remain attractive"* — with INFY as one of the top picks to play it.

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### Current CLSA valuation set-up on INFY

| Field | Value | Source |
|---|---|---|
| Rating | **O-PF (Outperform)** | 18-Jun, 20-Jun [3][4] |
| Target Price | **Rs 1,861** | 18-Jun, 20-Jun [3][4] |
| Implied upside | **+14% to +17%** (vs Rs 1,622–1,633 spot) | 18-Jun, 20-Jun [3][4] |
| Market cap | **US$77–79bn** | 18-Jun, 20-Jun [3][4] |
| CLSA top-picks list | INFY, TechM, PSYS | 20-Jun [3] |
| CLSA vs Consensus (1QFY26) | Revenue in-line (-0.4%), EBIT **+2.3%**, EPS +0.7% above consensus | 18-Jun [4] |

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### Caveats — what CLSA is NOT saying

- CLSA is **not** changing the rating itself (already at O-PF) or raising the target price. The incremental positivity is being expressed through (a) the portfolio-level swap, (b) top-pick designation, and (c) catalyst flagging rather than a TP upgrade.
- Discretionary spending remains muted; tariffs are still pressuring retail and auto; "guarded optimism" — not euphoria [2].
- On Gen AI broadly, CLSA's own 24-Jun Access Day takeaways acknowledge *"high level of uncertainty"* and *"jury is still out"* on key questions for the IT services sector — i.e., the bullish stance is in spite of, not because of, Gen AI clarity.
- For US large-cap IT exposure, **TCS still carries a higher implied upside (+23.8% to Rs 4,275)** than INFY (+14%) per the same comp table [4] — so the swap reflects relative *conviction* and near-term catalyst path (acquisition closures + buyback-style optionality at INFY), not purely upside-to-TP arithmetic.

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**Sources**
[1] India Strategy (Weekly wrap) — CLSA, 16 May 2025 — 607959733LinqAlpha.PDF
[2] India IT 1QFY26 (Commentary preview—status quo) — CLSA, 18 Jun 2025 — 607962319LinqAlpha.PDF
[3] India IT (Accenture 3Q25 read-across) — CLSA, 20 Jun 2025 — 607962486LinqAlpha.PDF
[4] India IT 1QFY26 (Commentary preview—status quo), TP/rating comp table — CLSA, 18 Jun 2025 — 607962319LinqAlpha.PDF
[5] India IT 1QFY26 (Commentary preview—status quo), Top-picks paragraph — CLSA, 18 Jun 2025 — 607962319LinqAlpha.PDF
[6] India IT 1QFY26 (INFY demand outlook table) — CLSA, 18 Jun 2025 — 607962319LinqAlpha.PDF
[7] Global US NDR feedback and Gen AI Access day line-up — CLSA, 10 Jun 2025 — 607961681LinqAlpha.PDF
[8] India IT 1QFY26 (Verticals commentary) — CLSA, 18 Jun 2025 — 607962319LinqAlpha.PDF

