CHENNAI: Infosys on Wednesday reported a mixed set of numbers for the October–December quarter, with revenue growth holding up despite a marginal decline in profit, reflecting a gradual recovery in technology spending amid persistent cost pressures and cautious client budgets.
The Bengaluru-based IT major posted a consolidated net profit of Rs 6,654 crore for the third quarter of the current financial year, a decline of about 2 percent from a year earlier. The fall in profit came even as the company recorded a healthy rise in business, indicating that higher operating expenses, investments in talent and technology, and pricing pressures continued to weigh on margins.
Revenue from operations rose 8.9 percent year on year to Rs 45,479 crore, supported by steady demand across key verticals such as financial services, manufacturing, retail and digital transformation. Growth was driven by a pick-up in large deal wins and increased traction in areas such as cloud services, artificial intelligence-led solutions and automation, which have become central to enterprise technology spending. Infosys raised its revenue guidance for FY26 to 3–3.5% in constant currency terms from 2-3% quoted earlier, and retained the margin guidance at 20–22%.
“Infosys delivered a strong Q3 performance demonstrating how our differentiated value propositions in enterprise AI, through Infosys Topaz, are consistently driving higher market share,” said Salil Parekh, CEO and managing director.
The company’s performance during the quarter suggested that while global clients remain selective in discretionary technology spending, they are continuing to invest in projects that promise efficiency gains and long-term cost savings. This has helped Infosys sustain topline growth even in a challenging global environment marked by geopolitical uncertainty and uneven economic recovery in key markets. The company recorded an exceptional item of Rs 1,289 crore in the quarter due to the impact of labour codes. In constant currency terms, revenue grew 1.7% YoY and 0.6% on a quarter-on-quarter basis.
Management indicated that the deal pipeline remains strong, with new contracts and renewals providing revenue visibility for the coming quarters. A greater share of recent deal wins has come from new business, highlighting Infosys’s ability to gain market share and deepen relationships with global clients despite intense competition in the IT services sector.
The slight dip in profit was largely attributed to higher costs, including employee-related expenses, investments in digital capabilities and continued spending on building next-generation platforms and offerings. While these investments have weighed on margins in the short term, the company believes they are essential to remain competitive and to capture growth opportunities in fast-evolving technology segments.
On the outlook, Infosys expressed confidence about the rest of the financial year and raised its revenue growth guidance, signalling that demand conditions are improving and that its order book provides better visibility than earlier anticipated. The improved guidance reflects management’s belief that enterprise clients are slowly unlocking technology budgets, particularly for projects linked to efficiency, automation and digital modernisation.
Overall, the third-quarter performance underlined Infosys’s resilience in navigating a difficult global environment. The company managed to deliver strong revenue growth and strengthen its business pipeline, even as profitability faced pressure. With deal activity picking up and clients increasingly focusing on digital and AI-led transformation, Infosys appears well placed to sustain growth momentum in the coming quarters, although margin recovery is likely to depend on how quickly cost pressures ease and pricing improves across the industry.