Jan 16 (Reuters) - Infosys rose 5% on Friday after unexpectedly raising its fiscal 2026 revenue forecast, pointing to a possible turnaround for India's $283 billion IT industry as AI-led partnerships drive deals.
Shares of India's No.2 software services exporter led gains on the Nifty 50 index with its strongest intraday rise in four months and lifted the Nifty IT sub-index 2.2% higher.
Infosys's push for vendor consolidation is boosting growth prospects, while its AI library is strengthening its position as clients expand account sizes during renewals, Morningstar said.
"Infosys is in a better competitive position compared with other Indian IT consulting firms due to its comprehensive AI offerings," the brokerage added.
The company has won AI-led deals with Adobe and Siemens AG in 2025 but did not disclose its AI revenue.
Its order book for deals above $50 million rose to a two-year high at $4.8 billion.
At least three brokerages, including Jefferies, raised their target price after the results.
On Wednesday, Infosys said revenue would grow 3%–3.5% in the fiscal year ending March 31, 2026, above its earlier forecast of 2%-3%.
The outlook points to steady discretionary tech spending and momentum in its core financial services business, two days after rival Tata Consultancy Services flagged strong 2026 demand.
Revenue from the financial services segment, which accounts for nearly a third of Infosys's sales, rose 3.9% during the quarter.
Earlier this week, TCS posted its third-quarter revenue marginally above estimates on AI-driven demand. Shares were up 1.6% on the day.
Wipro, which is due to report its quarterly earnings later in the day, climbed 3.2%.
(Reporting by Urvi Dugar in Bengaluru; Editing by Sumana Nandy)
