23-07-2025
Infosys Forecasts FY26 Revenue Growth at 1-3%, Profit up 8.7%
The dollar revenue for the first quarter was up 3.8 per cent annually in constant currency to USD 4.94 billion on the back of large deals bookings with a total contract value of USD 3.8 billion, 50 per cent of which are net new.
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Infosys, India's second largest IT services firm by revenue, has forecast a revenue growth of 1-3 per cent for full fiscal FY26 reflecting a strong performance and a more stable business outlook. The operating margin guidance stood at 20-22 per cent.
The Bengaluru-based company reported a net profit of INR 6,921 crore for the first quarter ended June, up 8.7 per cent from the year-ago period. The revenue for the first quarter was up 7.5 per cent YoY to INR 42,279 crore.
The dollar revenue for the first quarter was up 3.8 per cent annually in constant currency to USD 4.94 billion on the back of large deals bookings with a total contract value of USD 3.8 billion, 50 per cent of which are net new.
"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", said Salil Parekh, CEO and MD, Infosys. "Our large deal wins of USD 3.8 billion reflect our distinct competitive positioning and deep client relationships."
"The company is seeing broad-based growth across verticals with clients selecting us for consolidation…there have been about 300 AI agents deployed and clients have seen about 5-15 per cent productivity benefit through our AI programs," Parekh said in an earnings call with the media.
The Indian IT services industry has been facing challenges over the past few quarters due to continued caution around discretionary spending, delayed decision-making, and tighter project scrutiny weighing on deal ramp-ups and execution.
Operating margins for the first quarter narrowed 30 basis points to 20.8 per cent from 21.1 per cent in the corresponding quarter of the previous year.
"We continue to leverage Project Maximus to make investments in strategic priorities to drive profitable growth and enhance shareholder value," said Jayesh Sanghrajka, CFO, Infosys. "Cash flow conversion was well above 100 per cent for the fifth consecutive quarter. The impact of currency volatility was effectively managed through our proactive hedging strategy."
Sector wise, growth was driven by the manufacturing sector that grew 5.6 per cent in constant currency and contributed 16.1 per cent to the total revenues for Q1. Financial Services, the largest vertical for Infosys, grew 5.6 per cent annually in constant currency and contributed 27.9 per cent to the total revenues during the June quarter.
The voluntary attrition rate on a trailing 12-month basis increased to 14.4 per cent from 14.1 per cent in the preceding three months taking the total headcount to 323,788 as of June 30, 2025.
Infosys declared its results on Wednesday after market hours. Ahead of the results, Infosys shares closed up 0.27 per cent at INR 1,574.40 on the BSE.
