INFY enters May with its lending market running completely dry — every share available to borrow is already out on loan — while cost to borrow has more than doubled in a month and short sellers quietly build positions ahead of the July earnings cycle.
The most striking signal right now is in the borrow market. Availability has been at zero — or as close to zero as it gets — for essentially every trading day since late March, meaning there are no shares left in the lending pool for new shorts to access. That is as tight as the borrow market gets. Cost to borrow has responded in kind: it has climbed to 24.3% APR, up 15% on the week and more than double where it was a month ago at roughly 10%. When borrowing costs spike this sharply while availability stays at zero, it typically signals a scramble for existing positions rather than fresh short-selling pressure — the borrow is getting re-priced on a fixed supply.
Short interest itself has been grinding higher throughout April. Estimated short shares have risen roughly 6.5% over the past month to around 159 million shares on the NYSE ADR. The ORTEX short score has ticked up steadily to 74.1 — a reading that ranks among the more elevated in the market — and the official FINRA fortnightly data puts days-to-cover at 10.4, a substantial figure for a large-cap name. Options positioning amplifies the defensive lean: the put/call ratio is running at 2.83, modestly above its 20-day average of 2.36. The PCR has been structurally elevated since mid-April — rising sharply from the 1.7-2.0 range that prevailed through March — suggesting options traders have been adding downside protection in step with the building short interest.
The Street's reaction to the Q1 FY2027 results released on April 23 tells the same story. Analysts responded to the print by cutting targets across the board. BMO Capital lowered its target to $15 from $20 while holding a Market Perform. Susquehanna trimmed to $14 from $16, also keeping its Neutral. TD Cowen had moved to $15 from $16 earlier in the month. The direction of travel is consistent: no upgrades, no new buys, just a quiet ratcheting down of price targets from a group of analysts who already sat on the sidelines. The consensus mean target is now $14.68, implying roughly 19% upside from the current $12.34 level — but given that the gap has been closing as targets fall rather than the stock rising, that headline upside figure deserves context. Valuation multiples offer a mixed read: the P/E has compressed to around 14.6x, down more than 2 points in a month, while EV/EBITDA has contracted roughly 0.8x over the same period — the market is paying less for the business than it was just four weeks ago.
The bull case rests on BFSI strength and improving workforce utilisation. Bears point to the 3.5% year-on-year constant currency revenue decline in the most recent quarter and a 30-basis-point squeeze on operating margins to 20.8%. The earnings history is consistent on one point: the April 23 print landed a 4.6% one-day drop, and that reaction is not an outlier. Factor scores add nuance — EPS momentum over 30 days ranks in the 85th percentile, suggesting estimates may be stabilising after earlier cuts, though the 12-month forward EPS growth outlook ranks only in the 22nd percentile, so the stabilisation is from a low base. The dividend score ranks near the top of the universe at 99th percentile, a reminder that the yield story remains intact even as growth expectations fade. Among close peers, CTSH held up better on the week, nearly flat, while GLOB and EPAM fell 6.4% and 4.1% respectively — INFY's 8.5% weekly decline was notably steeper than most of its IT services peers.
With the next earnings event pencilled in for July 16, the lens shifts to whether borrow costs stabilise or continue to climb as short interest approaches its recent ceiling, and whether the run of analyst target cuts following this quarter's results has fully run its course.
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