Brokerage firm CLSA on Wednesday slashed its price target for Infosys shares to Rs 1,566, predicting that the stock price could drop by 40 per cent from current levels.

CLSA said that the recent appreciation in the currency of India might prove negative for the country's software exporters, including Infosys, and its share prices could slip.

The internal note, which was in the form of an e-mail, added that price of Infosys' stock could drop by 40 per cent in a year.

Following the circulation of the report, shares of Infosys slipped 2 per cent from Wednesday's high of Rs 2,619, and at one point touched the day's lowest point of Rs 2,562.25. However, the stock recovered to close at Rs 2,579 a share.

Japan-based brokering firm Nomura also said that Infosys faced the risk of ad additional cut in revenue guidance as intense competition weighed down investor sentiment in the stock.

In a note to clients, Nomura analysts Pinku Pappan and Ashwin Mehta said, "We continue to prefer TCS over Infosys/Wipro within our Neutrals. Infosys remains our least preferred stock in tier-1 IT."

TCS remains the favourite software firm of most brokerages.