If Infosys falls 15-20%, then it is the time to buy it

If Infosys falls 15-20%, then it is the time to buy it


Infosys, a global leader in the technology services and consulting space, has consistently been one of the top-performing stocks in the Indian stock market. With a strong track record of growth and innovation, the company has managed to stay ahead of the curve and deliver impressive returns to its investors. However, stock markets can be volatile, and even the best-performing stocks may experience temporary setbacks. In this article, we will discuss why a potential 15-20% fall in the Infosys stock price could be an opportune moment for investors to consider adding it to their portfolios.

Understanding the Business Model

Before diving into the investment potential, it is crucial to understand the business model and competitive advantages that have helped Infosys carve out a niche for itself in the global technology landscape.

  1. Diversified Service Offerings: Infosys offers a broad range of services, including IT consulting, software development, business process management, and digital transformation solutions. This diversified service portfolio allows the company to cater to the varying needs of clients across industries, providing a stable revenue stream and minimizing the impact of sector-specific slowdowns.
  2. Global Client Base: The company has established a strong presence in several key markets, including North America, Europe, and Asia-Pacific. This geographical diversification not only helps Infosys tap into growth opportunities in emerging markets but also reduces its dependence on any single economy.
  3. Skilled Workforce: Infosys employs a large and talented workforce, with access to a rich pool of skilled professionals in India. The company invests heavily in employee training and development, ensuring that it stays at the forefront of technological advancements and maintains its competitive edge.
  4. Focus on Innovation: Infosys has a strong focus on innovation, with dedicated research and development centers working on cutting-edge technologies such as artificial intelligence, machine learning, and blockchain. This emphasis on innovation allows the company to stay ahead of the curve and deliver value-added services to its clients.

Evaluating the Financials

A thorough analysis of a company’s financials is essential for any investment decision. Let’s take a look at some key financial aspects of Infosys that make it an attractive investment option.

  1. Revenue Growth: Infosys has consistently reported robust revenue growth over the past few years, driven by its diversified service offerings and expanding global client base. The company’s strong growth trajectory highlights its ability to capitalize on the increasing demand for technology services and solutions.
  2. Profitability: Infosys boasts impressive profitability metrics, with healthy operating margins and return on equity (ROE) ratios. The company’s ability to maintain profitability while pursuing growth is a testament to its efficient management and cost control measures.
  3. Strong Balance Sheet: Infosys has a strong balance sheet, with low levels of debt and ample cash reserves. This financial stability allows the company to weather economic downturns and invest in growth opportunities, without compromising its overall financial health.
  4. Attractive Valuation: Despite its strong financial performance, Infosys often trades at relatively attractive valuation multiples, particularly during market corrections. A potential 15-20% fall in the stock price could bring the valuation multiples down to even more compelling levels, making it an attractive investment opportunity.

Why a 15-20% Fall Could Be a Buying Opportunity

  1. Market Overreaction: Stock markets can be prone to overreactions, with negative news or short-term headwinds sometimes causing stocks to fall more than warranted by the underlying fundamentals. If Infosys were to experience a 15-20% decline in its stock price, it could potentially be a result of such an overreaction, presenting an opportunity for long-term investors to buy the stock at a discounted price.
  2. Long-term Growth Prospects: Despite any short-term volatility, the long-term growth prospects for Infosys remain strong. The increasing demand for digital transformation services, coupled with the company’s focus on innovation and expansion into new markets, bodes well for its future growth potential. A temporary dip in the stock price could be an opportunity for investors to capitalize on these growth prospects at an attractive entry point.
  3. Attractive Dividend Yield: Infosys has a history of paying consistent and growing dividends to its shareholders. A 15-20% decline in the stock price would result in a higher dividend yield, making it an even more attractive proposition for income-seeking investors.
  4. Margin of Safety: Buying a stock at a lower price provides a margin of safety, as it reduces the downside risk associated with the investment. If Infosys were to fall 15-20%, investors would have the opportunity to buy the stock at a price that offers a higher margin of safety, increasing the likelihood of favorable long-term returns.


A potential 15-20% decline in the Infosys stock price could be an opportune moment for investors to consider adding the stock to their portfolios. With a strong business model, impressive financial performance, and compelling long-term growth prospects, Infosys is well-positioned to continue delivering value to its shareholders. By capitalizing on temporary market volatility, investors can potentially acquire a high-quality stock at an attractive valuation, increasing the likelihood of favorable long-term returns. As with any investment decision, it is crucial to conduct thorough research and analysis, and consult with a financial advisor before making any decisions.