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JPMorgan reiterates Overweight rating on Infosys stock, citing strong cash position

Published 09/09/2025, 08:48
JPMorgan reiterates Overweight rating on Infosys stock, citing strong cash position
INFY
0.53%

Investing.com - JPMorgan has reiterated an Overweight rating on Infosys Ltd. (NYSE:INFY) with a price target of INR1,900.00, highlighting the company’s substantial cash reserves and potential for share buybacks.

The Indian IT services giant held $5.3 billion in net cash as of June 2025 and approximately $11 billion in paid-up capital and free reserves, according to JPMorgan’s analysis. Infosys generated $3.9 billion in free cash flow during the 12 months ending June 2025.

Under current regulations, Infosys could execute a maximum buyback of approximately $2.7 billion with shareholder approval, or about $1.1 billion with only board approval. The company’s previous three buybacks in fiscal years 2023, 2022, and 2020 were conducted through the open market route.

Infosys has renewed its capital allocation policy, committing to return 85% of free cash flow over fiscal years 2025-2029. In fiscal year 2025, the company returned approximately 50% of its free cash flow via dividends, leaving a $1.4 billion backlog that suggests an acceleration is needed over the remaining years.

JPMorgan believes a significant buyback could provide support for Infosys stock in the coming months, noting that buybacks are infrequent but earnings accretive, and recommends the company maximize the amount to avoid falling behind its target payout ratio.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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