Big deal wins mark FY26 for Infosys, AI driver-in-chief

Bengaluru: Infosys, India’s second-largest IT services exporter, reported a strong start to FY26, posting a 9 percent year-on-year (YoY) growth in consolidated net profit to ₹6,921 crore for the quarter ended June 30, 2025.

Riding on robust deal wins and growing enterprise demand for AI-led solutions, the company raised the lower end of its FY26 revenue growth guidance to 1-3 percent in constant currency, up from 0-3 percent earlier.

Revenue from operations grew 8 percent YoY to ₹42,279 crore, beating analyst estimates, while EBIT came in at ₹8,803 crore, slightly below projections. Constant currency revenue rose 3.8 percent YoY and 2.6 percent sequentially (QoQ), signalling gradual demand recovery in key markets.

“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 $3.8 billion reflect our distinct competitive positioning and deep client relationships,” he added.

Strong deal pipeline, AI driving growth

Infosys clocked $3.8 billion in large deal wins in Q1 FY26 — a 46 percent jump over Q4’s $2.6 billion. Notably, 55 percent of the wins were net new, underscoring Infosys’ success in capturing market share amid a cautious global IT spending environment.

With enterprises ramping up investments in AI transformation, Infosys’ proprietary platforms and consulting-led approach are proving to be strategic differentiators. Project Maximus — the company’s transformation initiative — continues to drive operational agility and investment in future-ready capabilities.

Financial highlights (Q1 FY26):

• Net Profit: ₹6,921 crore, up 9 percent YoY (vs ₹6,368 crore in Q1 FY25)
• Revenue: ₹42,279 crore, up 8 percent YoY
• EBIT: ₹8,803 crore; EBIT margin at 20.8 percent, down 0.3 percent YoY
• Basic EPS: ₹16.70, up 8.6 percent YoY
• Free Cash Flow (FCF): ₹7,533 crore, with FCF conversion at 108.8 percent of net profit
• Operating Margin Guidance: Maintained at 20-22 percent for FY26

“Q1 performance is a clear reflection of our unwavering focus on multiple fronts, resulting in strong growth at 2.6 percent QoQ, resilient margins at 20.8 percent, and an EPS increase of 8.6 percent YoY,” said Jayesh Sanghrajka, CFO, Infosys.

“Cash flow conversion remained above 100 percent for the fifth consecutive quarter, despite currency volatility,” he added.

Market reaction and outlook

Infosys shares ended the day 0.90 percent lower at ₹1,556 on the BSE, ahead of the earnings announcement. Despite the dip, the stock has remained resilient within a 52-week range of ₹1,307.10 to ₹2,006.80. The company’s market capitalization currently stands at ₹6.54 lakh crore.

Looking ahead, Infosys remains cautiously optimistic. With digital transformation mandates back on the boardroom agenda, and AI integration gaining traction, the company expects demand momentum to improve in the second half of FY26.

Analysts’ take

Analysts noted that Infosys delivered a “steady” performance, with positive signals coming from deal pipeline strength and stability in margins. While operating margins saw a marginal dip YoY and QoQ, the company’s proactive cost management and focus on high-value services, including cloud, data, and AI, are expected to support sustainable profitability.