Infosys takes Rs 1,289-crore hit from new labour codes

Infosys Q3 consolidated net profit fell over 2 percent due to a labour code-related charge, missing Street expectations.

Infosys, India’s second-largest IT firm, reported a Rs 1,289 crore exceptional charge in its December quarter earnings report on account of the statutory impact of new labour codes.

The Bengaluru-headquartered firm said it assessed and disclosed the incremental impact of these labour law changes on the basis of legal opinion obtained and the best information available.

The adjustments for labour codes represent an increase in gratuity liability arising out of past service cost and an increase in leave liability, together by Rs 1,289 crore, which is recognised in the Consolidated Statement of Comprehensive Income.

Tata Consultancy Services (TCS) on January 12 reported Rs 2,128 crore and HCLTech Rs 956 crore exceptional charge on account of new labour codes.

Infosys 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.

"Whatever is to be approved in this quarter has been approved in the books, and that is being approved. There will be an ongoing impact of roughly around 15 basis points on an annual basis points," Chief Financial Officer Jayesh Sanghrajka said while addressing the post-earnings press conference.

Meanwhile, Infosys’s Q3 FY26 consolidated net profit fell 2.2 percent year-on-year to Rs 6,654 crore, missing Street expectations, even as the IT major posted steady sequential growth and strong deal wins in a seasonally weak quarter.

India’s second-largest IT services company, Infosys Ltd, has revised its revenue growth guidance in the range of 3-3.5 percent for FY2025-26. In October, the Bengaluru-based firm had narrowed its revenue growth guidance for the full year to 2-3 percent.