Infosys Q3 results: Net profit declines 2% annually to ₹6,654 crore, raises revenue guidance to 3%-3.5%

Infosys, the country's second largest information technology (IT) services company on Wednesday, January 14, reported net profit of ₹6,654 crore in the third quarter of current financial year (Q3FY26), marking a decline of 2.2% from ₹6,806 crore in the same period last year. On a sequential basis, Infosys net profit declined 9.6% from ₹7,364 crore in the previous quarter.

The decline in profit came on the back of one time adjustment of ₹1,289 crore for implementation of new labour codes which were announced by the government in November last year.

"The adjustments for Labour Codes represent an increase in gratuity liability arising out of past service cost and increase in leave liability together by $143 million (₹1,289 crore) which is recognized in the Consolidated Statement of Comprehensive Income," Infosys said in an exchange filing.

The Bengaluru-based company's revenue from operations jumped 9% annually to ₹45,479 crore from ₹41,764 crore in the year-ago period. Sequentially its revenue rose 2.2% from ₹44,490 crore. In constant currency terms revenue rose 1.7% annually and 0.6% sequentially.

The company has raised its revenue growth guidance to 3%-3.5% from its earlier growth guidance of 2%-3% and it expects margins to be in range of 20%-22% for the current financial year.

Revenue from financial services business contributed 28.2% towards the total revenue. Manufacturing, Energy, Utilities, Resources & Services, Retail and Communication businesses reported revenue contributions of 16.7%, 13.2%, 12.8% and 12.1% respectively.

“Infosys delivered a strong Q3 performance demonstrating how our differentiated value propositions in enterprise AI, through Infosys Topaz, are consistently driving higher market share. Clients increasingly view Infosys as their AI partner with demonstrated expertise, innovation capabilities and strong delivery credentials. This has helped them unlock business potential and enhanced value realization”, said Salil Parekh, CEO and MD.

“Central to this journey is our commitment to reskill, transform and empower our dedicated human resource pool to drive success in an AI augmented world”, he added.

At the end of the third quarter, total contract value (TCV) of large deal wins was $4.8 billion with net new of 57% and its headcount increased by 5,043. The company’s attrition came down to 12.3% from 14.3% in the previous quarter and 13.75% in the same period last year.

Key deal wins

• During the quarter Infosys extended its strategic collaboration with Metro Bank to transform the bank’s finance operations with a suite of Workday solutions
• Infosys unveiled its AI-first GCC model to accelerate the setup and transformation of global capability centers (GCCs) into AI-powered hubs for innovation and growth
• Infosys announced its collaboration with NHS Business Services Authority (NHSBSA) to deliver a new workforce management solution for NHS in England and Wales.
• Infosys collaborated with Telenor Shared Services to modernize its HR operations with a new Oracle Fusion Cloud Human Capital Management (HCM) solution.

Infosys shares ended 0.62% higher at ₹1,608.90, ahead of its earnings announcement.