According to analysts, Infosys shares have the best risk-reward ratio in the IT sector, with a potential upside of up to 28%.

The June quarter results of IT major Infosys are likely to be weak, but that is largely known to the Street. Information Systems' challenges are mostly priced in, according to analysts following the stock, and the stock offers the best risk-reward ratio in the IT industry.

Infosys is currently valued at 19.6 times one-year future earnings per share, which is closer to the 19 times average for the previous 15 years. Soft revenue growth in FY24 is already taken into account in the stock price, according to ICICI Securities, and the news of large deal wins should help the company re-rate from these levels.

Information Systems' challenges are mostly priced in, according to analysts following the stock, and the stock offers the best risk-reward ratio in the IT industry.

Infosys is currently valued at 19.6 times one-year future earnings per share, which is closer to the 19 times average for the previous 15 years. Soft revenue growth in FY24 is already taken into account in the stock price, according to ICICI Securities, and the news of large deal wins should help the company re-rate from these levels.

"Infosys has already announced 4-5 deal wins in the current quarter (Q1FY24) and has a good mega deal pipeline with some deals in advanced stages. We believe risk-reward ratio is favourable with limited downside (8-9 per cent) for Infosys from current levels in a bear case scenario of 8-9 per cent YoY CC revenue growth in FY25E and FY26E," it said in its analysis of Infosys annual report.

On the BSE, Infosys shares increased 1.64 percent to a high of Rs 1,286.70. ICICI Securities maintained its target price of Rs. 1,641, which implies a potential upside of 28%, valuing Infosys at 23 times on FY26 EPS of Rs. 80. The domestic brokerage claimed that Infosys has the best risk-reward ratio in the IT industry.

The macroeconomic downturn has had a negative influence on Infosys' discretionary business over the past few months, and the delayed decision-making and increased transaction scrutiny will directly affect the deal conversion, according to Motilal Oswal Securities. This brokerage expects Infosys' FY24 revenue growth to be 5.2% YoY in constant currency (CC) terms, which is below the target.