India’s second-largest software services firm Infosys reported a 9.64% sequential decline in net profit for the fiscal third quarter to ₹6,654 crore, largely hit by one-time provisions related to the implementation of new labour codes. This was in line with peers Tata Consultancy Services (TCS) and HCLTech, which also took a similar one-time hit on their bottom line. From the year before, profit declined 2.23%. The Bengaluru-based company posted revenue growth of 8.9% on-year and 2.2% quarter-on-quarter to ₹45,479 crore.
An ET poll of analysts had estimated net profit of ₹7,416 crore on revenue of ₹45,293 crore in the December quarter.
The hit from labour code implantation was pegged at ₹1,289 crore.
After a series of depressed quarters, during which macro and geopolitical concerns weighed on the industry’s growth expectations, Infosys spoke of better demand outlook, raised its revenue growth guidance for FY26 and added over 10,000 employees in the last two quarters. TCS and HCLTech had also cited improved technology spending earlier this week with the latter revising its revenue guidance upward.
“We see a good demand outlook… Our large deals pipeline remains healthy,” Infosys chief executive and managing director Salil Parekh told reporters in Bengaluru.
Financial services, energy, resources, utility and services are sectors seeing a rebound. “On financial services specifically, we see discretionary spend and good traction across the market,” Parekh said.
“Having said that, overall, we want to still see all of the other industries and segments start to show (growth),” he said.
Led by improvement in large deal momentum and spending across core industry verticals, Infosys said that it expects to now grow by 3%-3.5% in constant currency terms compared with its previous estimate of 2-3%. This is the second consecutive upward revision from the preceding quarter, when it tweaked the outlook from the earlier 1-3%. Infosys retained operating margin guidance at 20-22%. Parekh denied recent reports that said that an Infosys employee working in the US had been deported. Parekh said an employee had been denied entry into the US and sent back to India. The company didn’t expand on the reason for this. In dollar terms, Infosys revenue stood at $5.1 billion, up 3.2% YoY and 0.5% QoQ, in constant currency terms.
Infosys is handling 4,600 AI projects with over 500 agents. The teams have generated over 28 million lines of code using AI, the CEO said. “We are now witnessing six AI-led value pools emerging that could unlock a large incremental opportunity,” he said. “We also see productivity-led benefits that compress some legacy areas. The six large AI-led value pools are AI engineering services; data for AI; agents for operations; AI software development and legacy modernisation; AI deployed in physical devices; and AI trust and risk services.”
The company will share a comprehensive AI approach later this quarter, he said.
Positive outlook
“Infosys delivered Q3 revenue growth of 1.7% year-on-year and 0.6% quarter-on-quarter in constant currency, reflecting steady progress in the face of persistent macroeconomic challenges,” said Biswajit Maity, senior principal analyst at Gartner. “With rising IT spending and increasing demand for digital transformation, the overall outlook for the IT services sector appears positive.”
In the quarter, Infosys added 5,043 employees, its sixth consecutive quarter of headcount addition. From a year ago, the employee count rose by 13,655. At the end of the December quarter, it had 337,034 employees, higher than the September quarter count of 331,991.
An ET poll of analysts had estimated net profit of ₹7,416 crore on revenue of ₹45,293 crore in the December quarter.
The hit from labour code implantation was pegged at ₹1,289 crore.
After a series of depressed quarters, during which macro and geopolitical concerns weighed on the industry’s growth expectations, Infosys spoke of better demand outlook, raised its revenue growth guidance for FY26 and added over 10,000 employees in the last two quarters. TCS and HCLTech had also cited improved technology spending earlier this week with the latter revising its revenue guidance upward.
“We see a good demand outlook… Our large deals pipeline remains healthy,” Infosys chief executive and managing director Salil Parekh told reporters in Bengaluru.
Financial services, energy, resources, utility and services are sectors seeing a rebound. “On financial services specifically, we see discretionary spend and good traction across the market,” Parekh said.
“Having said that, overall, we want to still see all of the other industries and segments start to show (growth),” he said.
Led by improvement in large deal momentum and spending across core industry verticals, Infosys said that it expects to now grow by 3%-3.5% in constant currency terms compared with its previous estimate of 2-3%. This is the second consecutive upward revision from the preceding quarter, when it tweaked the outlook from the earlier 1-3%. Infosys retained operating margin guidance at 20-22%. Parekh denied recent reports that said that an Infosys employee working in the US had been deported. Parekh said an employee had been denied entry into the US and sent back to India. The company didn’t expand on the reason for this. In dollar terms, Infosys revenue stood at $5.1 billion, up 3.2% YoY and 0.5% QoQ, in constant currency terms.
Infosys is handling 4,600 AI projects with over 500 agents. The teams have generated over 28 million lines of code using AI, the CEO said. “We are now witnessing six AI-led value pools emerging that could unlock a large incremental opportunity,” he said. “We also see productivity-led benefits that compress some legacy areas. The six large AI-led value pools are AI engineering services; data for AI; agents for operations; AI software development and legacy modernisation; AI deployed in physical devices; and AI trust and risk services.”
The company will share a comprehensive AI approach later this quarter, he said.
Positive outlook
“Infosys delivered Q3 revenue growth of 1.7% year-on-year and 0.6% quarter-on-quarter in constant currency, reflecting steady progress in the face of persistent macroeconomic challenges,” said Biswajit Maity, senior principal analyst at Gartner. “With rising IT spending and increasing demand for digital transformation, the overall outlook for the IT services sector appears positive.”
In the quarter, Infosys added 5,043 employees, its sixth consecutive quarter of headcount addition. From a year ago, the employee count rose by 13,655. At the end of the December quarter, it had 337,034 employees, higher than the September quarter count of 331,991.
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