One quick thing: Good Glamm Group to cease as a house of brands, sell all assets individually: CEO Darpan Sanghvi

In today’s newsletter:

• Infosys posts Rs 6,921 cr Q1 profit, ups guidance
• Myntra’s Rs 1,654 cr FDI woes
• Why Paytm bid goodbye to DLGs

P.S.: Introducing the Tech3 Podcast, your daily dose of tech and startup insights. Monday to Friday! Check it out on Spotify or Apple Podcasts

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Quarter beat? Check. Guidance raised? Check. Deals signed? 4-quarter-high

Infosys, India’s second-largest IT firm, is flexing its AI muscle amid global uncertainty with a confident Q1 show.

Infosys reported better-than-expected earnings for Q1FY26, with net profit rising 8.7% YoY to Rs 6,921 crore and revenue up 7.5% to Rs 42,279 crore, both ahead of estimates.

• Operating margin stood at 20.8%, slightly lower than 21.1% a year ago but in line with expectations

Parekh is very bullish on AI and Agentic AI, attributing the industry-beating performance of the Bengaluru-headquartered firm to the nascent technology.

Infosys nudged up its FY26 revenue growth guidance to 1–3% in constant currency, from the earlier 0-3%.

“Economies worldwide are becoming more stable. But, it’s (macroeconomic challenges) not fully settled. Given that, we have increased our guidance on the lower end,” Salil Parekh, CEO and MD, Infosys said.

The company signed large deals worth $3.8 billion during the quarter, which is a four-quarter high, of which 55% were net new. 

• CEO Parekh said the performance reflected “the strength of our enterprise AI capabilities, the success in client consolidation decisions, and the dedication of our over 300,000 employees”

The IT services exporter has also deployed over 300 Agentic AI solutions, up from 200 in the last fiscal, which deliver 5-15% productivity gains for clients.

The IT services company added 210 employees in the fiscal first quarter, its fourth consecutive quarter of headcount addition.

• At the end of the June quarter, it had 323,788 employees, 8,456 more than in the year-ago period

• The attrition rate on a 12-month basis increased to 14.4% from 14.1% in the March quarter

Apart from Infosys, Tata Consultancy Services (TCS) is the only IT firm to report an increased employee count, as its base grew by 5,090 from the previous quarter.

• HCLTech and Wipro saw a drop of 269 and 114 employees. Tech Mahindra lost around 622 employees, and LTIMindtree 418

All in all, Infosys has had a stellar performance in Q1, despite macroeconomic uncertainties not being fully addressed.

Hemmed in by the ED? The fashion e-tailer’s B2B threads are under scrutiny — as investigators allege it’s retail in disguise.

That’s the question the Enforcement Directorate (ED) is asking about Myntra’s alleged FDI workaround.

• The agency claims Myntra violated FDI norms by running multi-brand retail operations under the pretext of wholesale trading

It alleges that Rs 1,654 crore worth of foreign investment was channelled through this structure in violation of policy.

• According to the ED, group firm Vector E-Commerce – an affiliated company under the same corporate umbrella – acted as the primary seller to end consumers, disguising B2C sales as B2B transactions on paper

Investigators say Vector was just a puppet in the act.

• ED officials believe Vector E-Commerce was set up specifically to sidestep India’s restrictions on foreign direct investment in multi-brand retail

They allege that sales to individual customers were falsely shown as wholesale, effectively masking retail operations.

• The complaint suggests this setup misrepresented the true nature of Myntra’s business activities to regulators

Myntra has responded with assurances of lawfulness and cooperation.

• The company says it has not yet received a copy of the ED’s complaint or any supporting documents related to the case

It has reiterated that it is fully committed to complying with all applicable laws and to cooperating with authorities.

• Myntra also spotlighted its role in powering India’s textile economy—digitising commerce, scaling craftsmanship, and stitching up jobs nationwide

Dig deeper

They say nothing is guaranteed–Paytm just took that to heart.

Paytm is officially moving out of the DLG (Default Loss Guarantee) model, a structure where fintechs covered early loan defaults for their lending partners.

• Even its largest lending partner, which earlier used DLG, has now switched to a non-guarantee model starting Q1 FY26.

• As a result, Paytm’s DLG-backed loan book dropped to Rs 4,444 crore in June, down from Rs 6,324 crore in March.

• The company confirmed it is no longer sourcing any new DLG loans. Income from this model comes solely from older cohorts

Interestingly, after years of denying any DLG exposure, Paytm cautiously entered the framework in August 2024 — only to exit within three quarters and revert to a risk-free, asset-light model.

Paytm no longer feels the need to offer safety nets, as strong repayments and repeat borrowers have made lenders confident in taking on the risk.

“We are building partnerships with NBFCs and banks that don’t need DLG because our asset performance is proven,” said CFO Madhur Deora.

Founder Vijay Shekhar Sharma added, “Most of our lending partners want to own the customer and underwriting… we remain a distribution platform.”

• On collections, he noted: “We don’t want the loan to look like ours,” underscoring Paytm’s effort to avoid regulatory overlap.

 This conservative stance also helps Paytm steer clear of regulatory trouble, especially after RBI scrutiny on its Payments Bank last year.

Despite ditching DLG, lending remains a bright spot.

• Merchant loan disbursals stood at Rs 3,583 crore in Q1 FY26, with over 50% to repeat borrowers

• Financial services revenue doubled YoY to Rs 561 crore, though it was flat sequentially due to the loss of the upfront fee tied to the DLG model.

Paytm’s move mirrors a broader trend in the industry, following tighter RBI rules on unsecured credit and DLG structures.

Dig deeper

• The White House is set to unveil a plan promoting the export of US AI technology while curbing state laws seen as overly restrictive to its growth.
  
  
• Composio, an agentic AI startup that enables AI agents to continue self-learning, has raised $25 million in a Series A round led by Lightspeed Venture Partners.

Raise your horns high, because the one and only Ozzy Osbourne has taken his final bow. 

The 76-year-old Black Sabbath icon, known for his groundbreaking music and wild antics, passed away on July 22.

• He gave us rock classics like Paranoid, Iron Man, and War Pigs, shaping the sound of a generation

Ozzy made darkness cool, made screaming an art and made millions of parents nervous.

• Gen Z and beyond may have trending songs for Instagram reels, but Ozzy had anthems that made speakers sweat

The "Prince of Darkness" may be gone, but his music lives on!

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