Infosys Q4 results in focus as TCS, Wipro miss estimates: What to watch out for

Here are five key themes to tack in Infosys’ numbers:

Tepid revenue growth

India’s second-largest information technology company is expected to post a sequential decline in revenue for the March quarter, reflecting the softness in discretionary IT spending.

Almost all brokerages expect Infosys to report a sequential decline — between 0.5 percent to 2.3 percent — in constant currency (cc) revenue.

“We forecast sequential revenue decline of 2.3 percent (as a result of) lower revenues from sale of third-party items for service delivery and seasonal weakness in demand. March quarter has been Achilles’ heel for Infosys,” Kotak Institutional Equities said.

Third-party or pass-through revenue refers to income that is collected on behalf of clients and typically arises when IT firms include third-party costs, such as software licenses, cloud services, etc., in their billing to clients.

Meanwhile, the absence of broad-based recovery and continued delays in ramp-ups could keep growth muted.

“We forecast revenue shall grow -1 percent QoQ (quarter-on-quarter) in CC terms and -1.5 percent QoQ in USD terms in-line with the implied guided range,” brokerage Nuvama Institutional Equities said.

TCS delays wage hikes due to uncertain environment

Margins and cost controls

EBIT margins are expected to fall 50–150 basis points QoQ, primarily due to wage hikes for junior employees, visa costs, and a lawsuit settlement (McCamish Systems).

While Infosys has taken steps to improve profitability, including pyramid rationalisation and lower subcontracting, margins are expected to be flat or marginally better.

Kotak expects EBIT margins at 20.4 percent, largely unchanged from the previous quarter, as benefits from operational efficiencies are offset by furloughs and seasonal weakness.

Commentary on FY26 margin levers, including utilisation and automation, will be important. Some brokerages expect the margin to decline due to a fall in revenue.

“We expect EBIT margin to decline by 44 bps (basis point) QoQ led by sequential decline in revenue,” brokerage Centrum’s Piyush Pandey said.

FY26 margin guidance is expected to remain stable at 20–22 percent, though Kotak noted a “bias of expansion”.

FY26 guidance

Infosys’ guidance for FY26 will be a critical monitorable.

Analysts are split on the growth numbers, which range from one percent to six percent in CC terms. They expect Infosys to continue its conservative tone on FY26 revenue guidance.

An optimism in commentary can spark a re-rating, given low investor expectations.

In the absence of mega deals and amid global macro uncertainty, FY26 could be as muted — or worse —than FY25, Kotak said.

GenAI ramp-ups, deal wins

Infosys has been vocal about its investments in generative AI, and Q4 would be closely watched for traction in this space.

While large-scale revenues from Gen AI are still some time away, investors will look for updates on pilot programmes, client-adoption trends and use cases going into production.

Analysts believe Infosys is well-positioned in the Gen AI space and could benefit from early wins in FY26.

“Commentary on core markets’ (US and Europe) performance and client budgets; update on large deal win ramp-ups and pipeline; hiring plans; investments in Gen AI partnerships and solutions,” Nuvama said of what it expects to hear from the management.

Hiring, headcount, internal optimisation

Headcount trends are expected to remain soft, with a further decline likely in the quarter gone by.

According to BNP Paribas, hiring is calibrated and selective, with the company pushing internal talent mobility to manage costs. The Street will watch for fresher onboarding timelines and lateral hiring commentary, as these offer clues to Infosys’ demand outlook.

Utilisation rates and training pipeline commentary will also be important signals.

Infosys’ Q4 results come at a time when the sector is still waiting for a demand revival. While cost takeouts and Gen AI-led programmes offer hope, investors will seek clarity on whether FY26 can finally mark a turnaround.