Infosys’ Role in the Nifty 50 and Market Significance
As one of the largest constituents of the Nifty 50 index, Infosys Ltd holds a pivotal role in shaping the index’s overall performance. With a market capitalisation of ₹6,61,823.17 crores, it is categorised firmly as a large-cap stock, making it a critical barometer for investor sentiment in the Indian IT sector. The company’s inclusion in the Nifty 50 ensures that it attracts significant attention from both domestic and global institutional investors, who often align their portfolios with benchmark indices.
Infosys’ benchmark status also means that its stock movements have a pronounced impact on index funds and exchange-traded funds (ETFs) that track the Nifty 50. Consequently, any rating upgrades or changes in institutional holdings can trigger broader market reactions, influencing sectoral and index-level trends.
Recent Rating Upgrade and Market Reaction
On 22 December 2025, Infosys Ltd’s Mojo Grade was upgraded from 'Hold' to 'Buy', reflecting an improved outlook based on comprehensive analysis of its fundamentals and market positioning. The company’s Mojo Score currently stands at 72.0, signalling a robust investment case supported by strong financial metrics and growth prospects. This upgrade is significant as it marks a shift in analyst sentiment, potentially attracting fresh capital inflows from investors seeking quality large-cap IT stocks.
Following the upgrade, Infosys’ share price has shown resilience, gaining 0.17% on 2 January 2026, marginally outperforming the Sensex’s 0.11% rise on the same day. The stock has also recorded a consecutive two-day gain, delivering a 1.03% return over this short period. These movements indicate cautious optimism among market participants, despite the broader sector and index volatility.
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Institutional Holding Trends and Their Implications
Institutional investors remain key stakeholders in Infosys Ltd, given its large-cap status and benchmark inclusion. While specific recent changes in institutional holdings are not disclosed here, the upgrade to a 'Buy' rating typically encourages increased participation from mutual funds, insurance companies, and foreign portfolio investors (FPIs). Such inflows can provide price support and liquidity, especially in a sector that has experienced mixed returns over the past year.
Infosys’ price-to-earnings (P/E) ratio currently stands at 23.49, which is notably lower than the industry average of 28.12. This valuation gap may attract value-conscious institutional buyers looking for quality IT stocks trading at a discount relative to peers. The company’s steady market cap grade of 1 further reinforces its appeal as a core portfolio holding for large investors.
Performance Analysis Relative to Benchmarks
Over the past year, Infosys has underperformed the Sensex, delivering a negative return of -16.62% compared to the Sensex’s positive 6.68%. However, shorter-term trends show signs of recovery, with the stock outperforming the Sensex over the last month (4.58% vs 0.17%) and three months (12.91% vs 5.31%). Year-to-date, Infosys has marginally outpaced the Sensex with a 0.98% gain against 0.08%.
Longer-term performance metrics reveal a more nuanced picture. Over three years, Infosys has returned 7.08%, lagging the Sensex’s 39.43%. Similarly, five-year returns of 29.50% trail the Sensex’s 78.17%. Yet, over a decade, Infosys has delivered a substantial 195.93% gain, closely tracking the Sensex’s 226.01%. These figures highlight the company’s resilience and capacity for long-term wealth creation despite cyclical headwinds.
Technical Indicators and Market Sentiment
From a technical perspective, Infosys’ current share price of ₹1,633.05 is trading above its 20-day, 50-day, 100-day, and 200-day moving averages, signalling a generally bullish medium- to long-term trend. However, it remains below the 5-day moving average, suggesting some short-term consolidation or profit-taking. This technical setup aligns with the cautious optimism reflected in the recent rating upgrade and modest price gains.
Sector-wise, Infosys’ performance today is inline with the Computers - Software & Consulting sector, indicating that broader industry factors continue to influence its price action. Investors should monitor sectoral developments, including global IT spending trends and currency fluctuations, which could impact future earnings and valuations.
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Outlook and Investor Considerations
Infosys Ltd’s recent upgrade to a 'Buy' rating by MarketsMOJO, combined with its strong Mojo Score of 72.0, suggests that the company is well-positioned to capitalise on growth opportunities in the IT services sector. Its valuation discount relative to industry peers and solid market cap grade make it an attractive proposition for long-term investors seeking exposure to India’s technology growth story.
However, investors should remain mindful of the company’s recent underperformance relative to the Sensex over the past year and the potential headwinds from global economic uncertainties and currency volatility. The stock’s technical indicators point to a cautiously positive trend, but short-term fluctuations may persist.
Given Infosys’ integral role in the Nifty 50 index, any significant changes in its share price or institutional holdings will continue to influence broader market sentiment. As such, it remains a key stock to watch for investors tracking India’s large-cap IT sector and benchmark indices.
Summary
Infosys Ltd’s upgrade to a 'Buy' rating, supported by a strong Mojo Score and favourable technical positioning, marks a positive development for the company amid a challenging market environment. Its benchmark status within the Nifty 50 index ensures continued institutional interest and market relevance. While recent performance has been mixed, the company’s long-term track record and valuation appeal provide a compelling case for investors seeking quality exposure in the Computers - Software & Consulting sector.
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