Infosys Lifts FY26 Growth Outlook as Deal Wins Strengthen Revenue Visibility

Infosys posted revenue of ₹45,479 crore in the December quarter (Q3FY26), recording a year-on-year increase of 8.9% and a sequential growth of 2.2%. In constant currency terms, revenue rose 0.6% from the previous quarter, reflecting stable demand conditions in an environment of cautious technology spending.

According to a report by Axis Direct, growth during the quarter was supported by the execution of large deals and continued traction in cost optimisation programmes across clients.

Profit Declines Due To Exceptional Labour Related Costs 

Net profit for the quarter stood at ₹6,666 crore, marking a 2.3% decline from a year earlier and a 9.6% drop quarter-on-quarter.

The decline was primarily due to exceptional expenses of ₹1,289 crore, arising from the implementation of revised labour regulations. Infosys indicated that while the one-time cost impacted quarterly profitability, the ongoing impact on margins is expected to be limited.

Margins Soften Amid Investments 

Operating margin for the quarter came in at 20.8%, down from the year-ago period. The moderation reflected higher spending on sales, marketing and capability building, along with lower utilisation levels.

The company retained its full-year operating margin guidance of 20–22%, indicating that margin pressures are expected to remain manageable.

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Large Deal Wins Improve Revenue Visibility 

Infosys reported large deal wins totalling $4.8 billion during the quarter, with more than half of these contracts being net new engagements.

Management said deal activity continued to be driven by vendor consolidation, efficiency-focused programmes, and selective discretionary spending, particularly in areas linked to digital transformation and automation.

FY26 Revenue Growth Guidance Raised 

On the back of improved deal execution and stronger pipeline visibility, Infosys raised its FY26 revenue growth guidance to 3–3.5% in constant currency terms, compared with the earlier range of 2–3%.

The company clarified that the guidance does not include any contribution from the proposed joint venture with Telstra, which is pending regulatory approvals.

AI Adoption Expands

Infosys said artificial intelligence continues to be a key area of client engagement. The company is currently running over 4,600 AI-related projects, covering around 90% of its top 200 clients.

These initiatives have resulted in the development of hundreds of AI agents, supporting areas such as application modernisation, data management, operational automation and software engineering productivity.

Regional Performance Mixed 

Growth trends varied across geographies. Europe recorded solid year-on-year growth, while North America saw a marginal decline, reflecting continued caution among clients in discretionary spending.

At the sector level, banking and financial services and manufacturing reported growth, while retail, life sciences, and hi-tech remained under pressure as clients focused on cost control.

Workforce Stabilises, Attrition Declines

Infosys added around 5,000 employees during the quarter, taking its total workforce to approximately 337,000.

Attrition fell to 12.3%, indicating improved employee retention compared with the previous year, according to the report. 

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