Latest news with #InfosysLtd
Mint
24-07-2025
- Business
- Mint
Was Infosys's solid Q1 performance a one-quarter wonder?
Infosys Ltd surprised the Street with sequential constant-currency (CC) revenue growth of 2.6% in the June quarter (Q1FY26) driven by traction across most verticals and geographies. It also saw40 basis points (bps) of inorganic contribution from the acquisitions of MRE Consulting and The Missing Link. Unlike in some earlier quarters, the quality of revenue generation improved, too, as growth was not driven by pass-through revenue this time. Revenuefrom the sale of third-party items bought for service delivery to clients is known aspass-through this, Infosys significantly exceeded the consensus CC revenue growth estimate of 1.5% and outpaced its tier-1 peers. The total contract value (TCV) for large deal wins declined 7% year-on-year to $3.8 billion in the quarter, but rose sequentially. Also, it was above the $2.4-2.6 billion range that Infosys clocked in recent 55% of the large-deal TCV was net new. Infosys closed 28 large deals in the quarter, with consolidation projects continuing to drive deal wins. Ideally, strong Q1 revenue and healthy deal bookings should have led to an increase in guidance. But that did not entirely materialise. The macroeconomicenvironment is still uncertain owing to lingering trade tariffs and geopolitical concerns. Clients thus remain cautious on discretionary IT spending, leading to delayed decision making, management and financial services verticalsaw healthy momentum, while hi-tech was weak, and manufacturing and retail were hit hardest by macro uncertainty. The stock declined 1.5% on Thursday. Guidance revisions While Infosys expects a stronger first half of FY26, the second half should see the usual seasonality. It has guided for FY26 CC revenue growth of 1%-3%, upgrading the lower end of guidance from 0 to 1% but leaving the upper end unchanged as it is currently not building in any macro improvement. Also, organic revenue growth guidance was trimmed from 0-3% to 0.6-2.6%. On the face of it this cut at the upper-end appears to be negative, said analysts at JM Financial Institutional Securities. Disappointingly, the guidance was revised despite positives such as productivity improvements from the enterprise AI platform aiding revenue trajectory and sequential improvement in deal wins. AI-driven productivity gains of 5-15% are being seen across client programmes, management said. The Q1FY26 earnings before interest and tax (Ebit) margin of 20.8% was lower than the consensus estimate. However, if helps that the sequential margin drop was only 20 bps, despite absorbing wage hikes, higher variable pay, and investments in sales and marketing. Headwinds from currency movements and sales and marketing investments were offset by an increase in realisation due to Project Maximus and lower third-party costs. Infosys maintained operating margin guidance of 20-22% for FY26. 'Given salary increment for the entire workforce is done in the last two quarters, further hikes are unlikely in the next two-three quarters, we think. Lower third-party expenses will be a key tailwind for margins, which should help offset potential ramp-up costs of large deals in FY26," said Nomura Global Markets Research report dated 23 July. Nomura expects Ebit margin of 21.1% in FY26, flat year-on-year. TCS's Ebit margin expanded 30 bps sequentially in Q1FY26 to 24.5%, but it is yet to decide on wage hikes for FY26. Meanwhile, Infosys shares have declined 15% over the past year, more than the 9.5% fall in the Nifty IT stock trades at 21 times estimated FY27 earnings, almost at par with TCS and HCL, showed Bloomberg data. Unless macros improve meaningfully, the Q1 positives alone may not be enough to salvage FY26 performance as near-term catalysts for a sharp re-rating seem limited.
News18
24-07-2025
- Business
- News18
Infosys shares decline over 1 pc post Q1 earnings
Agency: New Delhi, Jul 24 (PTI) Shares of Infosys Ltd declined over 1 per cent on Thursday morning trade as profit-taking emerged in the counter, a day after the firm reported its June quarter earnings. The blue-chip stock dropped 1.39 per cent to Rs 1,552.45 on the BSE. At the NSE, it dipped 1.39 per cent to Rs 1,552.60. Infosys Ltd on Wednesday reported an 8.7 per cent rise in June quarter net profit and narrowed its full-year revenue forecast after stronger-than-expected earnings growth. The company reported a consolidated net profit of Rs 6,921 crore in April-June — the first quarter of 2025-26 fiscal year — compared to Rs 6,368 crore earnings in the same period a year back, according to a company statement. The IT services company narrowed its annual revenue growth forecast to 1-3 per cent band from a prior 0-3 per cent range. Revenue from operations at Rs 42,279 crore was 7.53 per cent higher year-on-year and 3.3 per cent higher quarter-on-quarter, on the back of strong performance in AI and deal wins. Net profit, however, fell 1.5 per cent sequentially when compared to the January-March quarter. PTI SUM DRR view comments First Published: July 24, 2025, 11:30 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
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Business Standard
24-07-2025
- Business
- Business Standard
Infosys shares slip even after Q1 beat; Here's why investors are wary
Shares of Infosys Ltd. declined on Thursday, despite analysts remaining positive after the company reported in-line first-quarter earnings. The drop was likely driven by trimmed revenue guidance, even as deal wins rose. Sentiment was further weighed down by a sharp sell-off in mid-cap peers following their results, dragging most stocks in the index lower. The information technology (IT) firm's stock fell as much as 1.16 per cent during the day to ₹1,556.1 per share. The stock pared losses to trade 0.8 per cent lower at ₹1,560 apiece, compared to a 0.2 per cent advance in Nifty 50 as of 9:50 AM. Meanwhile, the Nifty IT index fell 1.25 per cent, dragged down by Persistent Systems and Coforge, which declined 7.5 per cent and 6 per cent, respectively. Shares of Infosys were trading at the lowest level since June 6 this year. The counter has fallen 17 per cent this year, compared to a 6.4 per cent advance in the benchmark Nifty 50. The IT firm has a total market capitalisation of ₹6.48 trillion. Track LIVE Stock Market Updates Here Infosys Q1 results The net profit of Bengaluru-based company came in at ₹6,921 crore, marking a sequential decline of 1.6 per cent. The top line grew 3.3 per cent on quarter-on-quarter (Q-o-Q) to ₹42,279 crore. Both the numbers beat Bloomberg estimates, where analysts had estimated a net profit of ₹6,778 crore and revenue of ₹41,724 crore. For the IT giant, financial services and manufacturing, which contributed 28 per cent and 16 per cent to the top line, respectively, were up 5.6 per cent and 12.2 per cent. Growth in manufacturing was a contrast at a time when other companies have seen their revenue hammered due to tariff fears. Why did Infosys stock fall? As the tech firm only raised the lower end of its revenue guidance, analysts said that this reflects heightened global uncertainties. Despite productivity improvements and a 44 per cent sequential increase in deal wins, totalling $3.8 billion, Infosys narrowed its organic revenue growth guidance from 0-3 per cent to 0.6-2.6 per cent, analysts at JM Financial noted. At first glance, the cut at the upper end may seem negative. However, analysts said that a strong first quarter and normal seasonality suggest that the revised guidance is not relying on a second-half recovery. Symbolically, the narrower range also reflects greater confidence, JM Financial said. Analysts at Antique Stock Broking noted that although this was a good quarter, the organic guidance was largely unchanged. The narrow guidance reflects a mid-point increase in guidance from 1.5 per cent to 1.7 per cent. The revision accounts for a continued uncertain environment driven by tariff-related concerns, geopolitical risks, and lower third-party revenue, analysts said. Infosys narrowed its FY26 revenue growth guidance, reflecting its Q1 performance, robust large deal wins, M&A contribution, Emkay Global said in a note. The upper end of the guidance assumes macro stability, while the lower end factors in risks from further deterioration in the external environment, Emkay said.
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Business Standard
24-07-2025
- Business
- Business Standard
Analysts stay bullish on Infosys after steady Q1 show; Should you buy in?
Infosys Ltd. retained bullish calls from several brokerages after the information technology (IT) major posted better-than-expected earnings for the first quarter of the current financial year (Q1FY26). As the tech firm only raised the lower end of its revenue guidance, analysts said that this reflects heightened global uncertainties. The net profit of Bengaluru-based company came in at ₹6,921 crore, marking a sequential decline of 1.6 per cent. The top line grew 3.3 per cent on quarter-on-quarter (Q-o-Q) to ₹42,279 crore. Both the numbers beat Bloomberg estimates, where analysts had estimated a net profit of ₹6,778 crore and revenue of ₹41,724 crore. The second-largest software-services provider raised the lower end of its guidance to 1 per cent from nil growth it had guided a quarter earlier. A quarter of strong deal wins worth $3.8 billion helped the company raise the guidance at the lower end, Chief Financial Officer Jayesh Sanghrajka said. For the IT giant, financial services and manufacturing, which contributed 28 per cent and 16 per cent to the top line, respectively, were up 5.6 per cent and 12.2 per cent. Growth in manufacturing was a contrast at a time when other companies have seen their revenue hammered due to tariff fears. Analysts on Infosys Q1 results Infosys reported decent Q1 results, with revenue in constant currency (CC) terms significantly ahead of estimates, Nuvama Institutional Equities said. Infosys delivered solid growth, both in magnitude and quality, supported by a reduction in third-party revenue, the brokerage said. While the guidance upgrade was modest, it appears reasonable in light of prevailing macro uncertainties. Nuvama retained their 'Buy' rating with a revised target price of ₹1,850 per share from ₹1,700 apiece earlier. The operating environment remains challenging for Infosys across several verticals, particularly where discretionary spending is under scrutiny, analysts at Centrum Broking said. Segments such as communications, high-tech, and retail continue to witness cautious IT budgets, while financial services and energy offer opportunities, it said. Despite macro headwinds, Infosys' hiring plans for FY26 remain intact, indicating management's confidence in deal conversions and execution capabilities, according to Centrum Broking. The 'Buy' rating was maintained with a revised target price of ₹1,942 apiece. The company narrowed its FY26 revenue growth guidance, reflecting its Q1 performance, robust large deal wins, M&A contribution, and prevailing macroeconomic uncertainty, analysts at Emkay Global said. It expects the first half of the year to outperform the second half. The upper end of the guidance assumes macro stability, while the lower end factors in risks from further deterioration in the external environment, Emkay said. The brokerage maintained FY26-28 earnings estimates and reiterated their 'Buy' rating with a target price of ₹1,750 per share. ALSO READ:
India.com
23-07-2025
- Business
- India.com
Good news for Narayana Murthy, Infosys earns Rs 69210000000 in…, CEO Salil Parekh says…
Narayana Murthy (File) Infosys Ltd on Wednesday reported an 8.7% year-on-year increase in net profit for the June quarter, while also narrowing its full-year revenue guidance following better-than-expected earnings growth. The IT major posted a consolidated net profit of Rs 6,921 crore for the April–June quarter of FY2025-26, up from Rs 6,368 crore in the corresponding period last year, the company said in a statement. Infosys Q1 Results The IT services company narrowed its annual revenue growth forecast to 1 per cent to 3 per cent band from a prior 0-3 per cent range. Revenue from operations at Rs 42,279 crore was 7.53 per cent higher year-on-year and 3.3 per cent quarter-on-quarter, on the back of strong performance in AI and deal wins. Net profit however fell 1.5 per cent sequentially when compared with the January-March quarter. 'Our performance in Q1 demonstrates the strength of our enterprise AI capabilities, the success in client consolidation decisions, and the dedication of our over 300,000 employees. Our large deal wins of USD 3.8 billion reflect our distinct competitive positioning and deep client relationships,' Infosys CEO and MD Salil Parekh said. Infosys CEO Salil Parekh On Q1 Results Briefing media at the Q1 earnings call, Parekh noted that the start to financial year had been strong. 'The main drivers of our growth were a leadership in enterprise AI, and a continued success in clients selecting us for consolidations. We are seeing good demand for AI agents,' he said. Geographically, North America accounted for 56.5 per cent of quarterly revenue, down from 58.9 per cent in the corresponding period of the previous fiscal. Europe increased its share to 31.5 per cent, up from 28.4 per cent in the Q1 FY25. Infosys CFO Jayesh Sanghrajka said that Europe has been strong footing for the company for past many quarters. 'That's on the back of the investment that we made a few years back in Europe. We had identified Europe as a geography to invest into and all of that is working well across sectors….but still, US remains the largest geography for us,' Sanghrajka said. The Large Deal TCV (or total contract value) stood at USD 3.8 billion.
