Infosys Surpasses Expectations, Boosts Revenue Projections
Infosys, the second-largest IT services firm in India, has reported a robust performance for the first quarter of its financial year 2026 (FY26). The company's net profit rose by 8.7% year-on-year to ₹6,921 crore, while revenue increased by 7.5% year-on-year to ₹42,279 crore.
The operating profit grew by 6.2% to ₹8,803 crore, with an operating margin of 20.8%, slightly down from 21.1% a year earlier. Earnings per share rose 8.6% to ₹16.70.
For the full financial year FY26, Infosys has revised its revenue growth guidance upwards to 1–3% in constant currency, narrowing the previous range of 0–3%. The company maintained its operating margin guidance at 20–22%. This revision was driven by stronger deal momentum, including acquisitions like MRE Consulting and Missing Link, as well as a healthy pipeline in sectors such as BFSI (Banking, Financial Services, and Insurance), EURS (Europe), and Hitech.
Key highlights of the Q1 FY26 performance include a 7.5% year-on-year revenue growth, with some brokerages forecasting up to 2.6% quarter-on-quarter organic growth aided by more working days and BFSI sector recovery. However, the operating margin slightly decreased due to senior wage hikes, acquisition costs, and higher onsite expenses, though this was partly offset by the absence of some visa-related costs from the prior quarter.
Infosys's deal pipeline remains strong, with a focus on generative AI and digital transformation driving long-term growth. The company also reported a sizable profit and revenue beat for Q1 FY26 compared to other major Indian IT firms.
Europe remained a bright spot for Infosys, growing by 16.2% year-on-year. The energy, utilities, and services vertical grew by 7.2% year-on-year, while the financial services vertical grew by 6.3%. The manufacturing vertical posted the highest growth at 14.8% year-on-year.
Infosys also announced a significant increase in the number of million-dollar clients, reaching 1,454. Among Infosys' top 20 clients in financial services, the company is the AI partner of choice for half.
However, the life sciences sector saw a decline of 6.6% year-on-year for Infosys. The net profit declined 1.6% quarter-on-quarter to Rs 6,921 crore.
Overall, Infosys's FY26 outlook is cautiously optimistic with moderate revenue growth expectations, stable margins, and strategic investments in emerging tech fields underpinning future growth prospects.
- The robust performance of Infosys in the first quarter of FY26 has led to a significant profit beat, setting a strong foundation for further investments in emerging tech fields like generative AI and digital transformation within the finance industry.
- Despite the decline in the life sciences sector, Infosys's deal pipeline remains robust, with a focus on long-term growth, as was evident from the increase in the number of million-dollar clients and their position as the AI partner of choice for half of their top 20 clients in financial services.
- In the ever-evolving market landscape of finance and technology, Infosys's strategic investments in DeFi (Decentralized Finance) could potentially position them advantageously, offering innovative solutions to cater to the evolving needs of the global market.
