Infosys Q3 net profit falls 2.2% on-year, misses estimate; revenue guidance raised, deal wins steady

Infosys Ltd

• Infosys Q3 net profit fell 2.2 percent YoY to Rs 6,654 crore, missing estimates
• Revenue rose 8.9 percent YoY; large deal wins totaled $4.8 billion in Q3
• FY26 revenue growth forecast increased to 3.0-3.5% in constant currency.

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Infosys Ltd raised its FY26 revenue growth guidance even as its consolidated net profit for the fiscal third quarter fell over 2 percent year-on-year due to a labour code-related charge, missing Street expectations. The IT major pointed to steady constant-currency growth, robust deal wins, and improving momentum in a seasonally weak quarter.

Infosys reported a 2.2 percent year-on-year decline in consolidated net profit for Q3 FY26 to Rs 6,654 crore, missing analyst estimates. Revenue for the quarter rose 8.9 percent on-year to Rs 45,479 crore, the company said in its results statement. The company’s net profit was hit as it incurred Rs 1,289 crore on account of labour codes.

A CNBC TV18 poll of analyst estimates had pegged Infosys' October-December net profit at Rs 7,445 crore and revenue at Rs 45,255 crore.

Operating margins came under pressure during the quarter. Reported operating margin declined to 18.4 percent from 21.3 percent a year ago, reflecting higher costs and the impact of labour code-related provisions. On an adjusted basis, operating margin stood at 21.2 percent during the quarter.

In constant currency terms, Infosys posted revenue growth of 1.7 percent year-on-year and 0.6 percent sequentially. The company also reported strong large-deal activity, with total contract value (TCV) of $4.8 billion in Q3, of which 57 percent was net new, providing support to medium-term revenue visibility.

Against this backdrop, Infosys raised its FY26 revenue growth guidance to 3.0-3.5 percent in constant currency terms, while reiterating its operating margin outlook of 20-22 percent for the year.

Commenting on the quarter, CEO and Managing Director Salil Parekh said Infosys delivered a strong performance driven by its enterprise AI-led offerings, adding that clients are increasingly viewing the company as a strategic AI partner with strong delivery capabilities.

“Our performance was broad-based in Q3 with sequential revenue growth, margin expansion on an adjusted basis, stellar large-deal wins and robust free cash flow generation in a seasonally weak quarter,” Chief Financial Officer Jayesh Sanghrajka said, adding that the company remained focused on disciplined capital allocation.

Infosys also reported free cash flow of Rs 8,176 crore for the quarter, with adjusted free cash flow of Rs 8,626 crore, translating into a conversion of over 113 percent of adjusted net profit.

Ahead of the results announcement, Infosys shares rose 0.6 percent to close at Rs 1,608.9 on the NSE. The stock has declined more than 17 percent over the past year, underperforming the benchmark Nifty 50, which has gained about 11 percent during the same period.

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