
Infosys Q1 preview: IT giant bets on new acquisitions amid uncertain macros
:
When Infosys Ltd announced in May that it had acquired US-based MRE Consulting and Australian cybersecurity services firm The Missing Link for about $98 million, the idea was simple: to increase its footprint in two areas where investments flow from across India's $283 billion IT services industry.
For Salil Parekh, who completes eight years as Infosys's chief executive in January 2026, the concern is growing the IT services company whose order book has little to boast of.
Infosys ended 2024-25 with large deals worth $11.6 billion, down 34% year-on-year. This order book also lacked contracts valued above $1 billion, essential in filling an IT outsourcer's revenue coffers.
Street expectations
Still, analysts are confident of Parekh's bet on the two acquisitions. Infosys is expected to post the fastest revenue growth among the top five Indian IT players, of up to 3.5% sequentially, showed a Mint analysis of at least five brokerages.
This optimism follows a lacklustre show by the rest of the top five in the first quarter of 2025-26. Tata Consultancy Services Ltd, the largest Indian IT outsourcer, and Wipro Ltd, the fourth largest, reported revenue declines of 0.59% and 0.35%, respectively. Third-largest HCL Technologies Ltd and fifth-largest Tech Mahindra Ltd reported sequential revenue growth of 0.97% and 1.97%, respectively. On the other hand,
For Infosys, talks of a $3 billion deal renewal with automaker Daimler, higher billing days, and dependence on revenue from banks and financial institutions are expected to increase the prospects of a first-place finish among the peers.
Still, the lack of big-ticket deals is not pleasing investors. The company's shares declined 14.82% in the first six months of 2025, second only to TCS, whose shares fell 15.58%. HCL Technologies and Wipro's shares fell 9.94% and 11.6%, respectively. The BSE Sensex gained 6.82% during the period.
Macroeconomic uncertainty leading to clients holding off on their tech spends is only expected to worsen the road ahead for the country's second-largest IT services provider should it not report a robust deal pipeline.
On top of it, US President Donald Trump's tariff war is making it tougher for companies to source materials to run their businesses, which is leading to IT project deferrals and cancellations.
With this backdrop, Mint lists the five expected talking points during Infosys's earnings announcement on 23 July.
1. Demand outlook
Infosys announces its first-quarter report card at a time when macroeconomic conditions are uncertain. While its large deal order book is strained, it might have to rely on large vendor consolidation deals and AI-led contracts, which might include revenue cannibalization.
This comes at a time when peers have given mixed opinions. While TCS, Wipro, and Tech Mahindra have called out uncertainties in the spending environment, HCLTech said the situation was stable and not as bad as expected.
At least one brokerage expected the uncertain macros to impact deal closures. 'New deal closures are delayed as clients still need clarity on how their supply chains and cost structure will be affected due to recent tariff announcements," said ICICI Securities analysts Ruchi Mukhija, Aditi Patil, and Seema Nayak, in a 1 July note.
The management's commentary on client behaviour and new deal wins will be tracked closely.
2. Revenue
The company is expected to report a strong first quarter, fueled by its acquisitions of MRE Consulting and The Missing Link. At least two brokerages expect the acquisitions to contribute 30 basis points (bps) to the company's first-quarter revenue. One basis point is one-hundredth of a percentage point.
'The revised guidance may include ~40 bps from The Missing Link and MRE Consulting acquisitions," said Kotak Institutional Equities analysts Kawaljeet Saluja, Sathishkumar S., and Vamshi Krishna, in a 30 June note.
Its revenue from banks is also expected to jump as four of the company's deal wins last quarter came from banks, which make up almost a third of the company's revenue. Analysts expect the company to raise the full-year revenue guidance to 1.5%-3.5% in constant currency terms.
3. Operating margins
Infosys's operating margins are expected to decline as it is expected to absorb the impact of the 5-8% offshore wage hike and ramp-up of large deals in the quarter. The company's plans to minimize the impact of the wage hikes will be gauged as two of the four largest IT outsourcers, including HCLTech and Wipro, have reported a decline in margins.
4. Hiring
Infosys added more than 6,000 employees in 2024-25, and its plan for additional hiring will be gauged, even as it has deferred onboarding of several of its new joinees in the past. The company's plans on hiring new employees will also be tracked because it comes at a time when peers have already called out a plan to cut headcount in certain geographies outside India. AI reducing the need for fewer people is also expected to put a cog in its hiring plans. Save TCS, which added 5,000 employees last quarter, each of the remaining companies has reduced its workforce.
5. AI
Infosys does not declare revenue or orders from Gen AI, unlike its larger peer Accenture, which has received $7.1 billion in total orders from Gen AI since September 2023.
Infosys chairman Nandan Nilekani, in his 2025 address to shareholders at the release of the company's annual report, said that'the advent of AI with all its possibilities and potential creates another arc of uncertainty. As enterprises look at applying AI to every aspect of the business, some long-standing challenges will become imperative and self-evident to firms."
Analysts have already pointed out that AI is leading to IT firms cannibalizing their revenue to pass Gen AI-led productivity to clients. Against this backdrop, Infosys's commentary on the new technology will be tracked.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


India.com
8 minutes ago
- India.com
France denounces US-European Union trade deal, French PM calls it..., Emmanuel Macron...
(Image: President Donald Trump shakes hands with European Commission chief Ursula von der Leyen in Turnberry. Pic: Reuters) New Delhi: France has criticized Sunday's, July 28 trade deal between US President Donald Trump and European Union (EU) President Ursula von der Leyen. French Prime Minister François Bayrou called it a dark day for the EU. What did France say over US-EU trade deal? François Bayrou said the EU had bowed to President Trump's increasing tariff pressure. He wrote on X: 'It is sad when a coalition of independent countries, formed to protect their common values and interests, buckles under pressure.' At the same time, French Minister of European Affairs Benjamin Haddad said that this situation is not good and the EU should take countermeasures. French Trade Minister Laurent Saint-Martin said, 'Trump only understands the language of power. If we should have taken countermeasures earlier, the deal might have been better.' However, French President Emmanuel Macron has remained silent on the matter. What is the response of Italy and Germany? German Chancellor Friedrich Mertz and Italian Prime Minister Giorgia Meloni welcomed the agreement. European Trade Commissioner Maros Sefcovic called it a 'big step' as it averted a trade war between the USA and Europe. Under the agreement, most goods going from Europe to the US will face a 15% tariff, three times the current 4.8%. However, the 30% tariff was avoided after Trump's threat of August 1. How much of Europe's goods will face 15% tariff? According to the details of the agreement, 70% of goods from Europe will be subject to 15% tariff. This includes cars, medicines and electronics. However, some agricultural products such as aircraft parts, some chemicals, semiconductor equipment and cork will not be subject to tariffs. There will be no tariff on drugs yet, and if there is one in the future, it will not be more than 15%. The EU will buy energy worth 750 billion dollars or about 64 lakh crore rupees from America in the next three years. Along with this, the EU will invest 600 billion dollars i.e. 51 lakh crore rupees in America.
&w=3840&q=100)

Business Standard
30 minutes ago
- Business Standard
India's foreign equity listings went cold after 2018, shows data
Debt issuances and convertibles keep flowing as equity stalls Sachin P Mampatta Mumbai Listen to This Article Indian entities haven't raised capital through foreign equity listings in over six years — the longest gap since liberalisation. The last such overseas equity fundraise was in 2018, according to data from Prime Database. Listings abroad occurred nearly every year from 1992 through 2016, with 2017 being a rare exception. After one final issue in 2018, there have been no subsequent listings. This lull comes as some Indian companies explore listings at Gujarat International Finance Tec-City (GIFT City), Gandhinagar, pitched as an alternative to offshore hubs like Singapore. The government in 2024 cleared the path for direct listings of Indian


Time of India
32 minutes ago
- Time of India
Satcom spectrum allocation rules likely to be in place within two months
New Delhi: Rules for the allocation of spectrum for satellite communications services are likely to be in place within two months, a government official said on Monday. The spectrum allocation rules are the last lap that will enable Elon Musk-led Starlink , Bharti Group-backed Eutelsat Oneweb and Jio SES to apply for the radiowaves and start rolling out their services. "Spectrum allocation rules are likely to be fixed in two months. After that, it will be at the discretion of satcom services when they want to roll out their services," the official said. The Telecom Regulatory Authority of India (Trai) has recommended that the government should allocate spectrum without auction and through an administrative process-- a move that has seen huge resistance from telecom operators Reliance Jio and Bharti Airtel initially. The regulator has suggested that spectrum for satcom services can be for a period of up to five years and considering the market conditions, the government may extend it for a further period of up to two years. Trai has suggested that spectrum charges for both GSO-based and Non-Geostationary Orbit (NGSO) Fixed Satellite Services should be levied at 4 per cent of adjusted gross revenue (AGR). OneWeb and Starlink fall into the LEO (low earth orbit) category which are considered to be Non-Geostationary Orbit (NGSO) satellites. Besides, NGSO-based Fixed Satellite service providers should also pay an additional per subscriber charge of ₹500 per annum in urban areas while exempting the rural and remote areas from this additional charge. While allaying the threat to land-based telecom networks from satcom services, Union Minister Pemmasani Chandra Sekhar said that Musk-led satellite communication services provider Starlink can have only 20 lakh connections in India with a peak speed of 200 megabits per second. A government official mentioned that the limit on Starlink connections is due to its existing capacity. The minister said that the upfront cost for satcom services will be too high and the monthly cost may be around ₹3,000. PTI