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Shares of Infosys are the top gainers on the Nifty 50 index, gaining as much as 4.1 percent in early trading to Rs 1,477.8.

Majority of the analysts who track Infosys have raised their estimates and price targets on the stock after its September quarter earnings and the announcement of a Rs 9,300 crore share buyback.

Although Bengaluru-based Infosys marginally missed estimates on the topline front, the miss was offset by a 150 basis points expansion in margins, that reversed the drop it witnessed during the June quarter.

The company also won deals worth $2.7 billion during the quarter, which is the highest in seven quarters. Credit Suisse believes that these deal wins and hiring data suggest that the growth momentum is likely to continue going forward.

While the brokerage expects macro headwinds to slowdown the IT services sector in the next financial year, it does not see a big impact on Infosys due to its large share of digital. CEO Salil Parekh mentioned on Thursday that 68.1 percent of Infosys' overall revenue came from digital.

Credit Suisse has maintained its outperform rating on Infosys with a price target of Rs 1,710.

Also Read: Infosys hired fewer employees in September quarter, fired moonlighters

Citing the highest margin beat among peers, robust deal wins and a healthy growth outlook, Bernstein has also maintained its buy rating on the stock with a price target of Rs 1,810.

Infosys announced its fourth share buyback in the last five years. It will buyback nearly 5 crore shares via the open market route at a price not exceeding Rs 1,850. The buyback may provide some downside support to the stock, according to CLSA. While Infosys remains the brokerage's preferred sector pick and a part of its India focus portfolio, the firm sounds cautious on low visibility on growth for the long-term.

Despite the improvement in margins, Macquarie sees plenty of headroom in utilisation for Infosys. It has maintained its outperform rating and its price target of Rs 1,870, which is higher than the company's maximum buyback price.

Nomura expects Infosys to continue outperforming TCS on the growth front. The brokerage is also confident of further margin recovery as it sees triggers in place for the same. The firm's buy rating on the stock has a price target of Rs 1,640.

Also Read: Infosys does not support dual employment, fired violators in last 12 months: Salil Parekh

UBS expects the stock to react positively to a "well-balanced quarter" from Infosys. The firm believes that the expansion in margins is enough to elicit a positive reaction in the stock with the buyback announcement being an add-on. However, the firm has maintained its neutral rating on the stock with a price target of Rs 1,490, which does not imply much upside from current levels.

Out of the 48 analysts that track the stock, 40 have a buy rating, six say hold, while two have a sell recommendation.

First Published:Oct 14, 2022 8:29 AM IST