Infosys Q3 net profit falls 2%; raises FY26 revenue guidance

IT firm takes Rs 1,289-cr hit due to new labour codes

Bengaluru: Bengaluru-based IT services company Infosys on Wednesday revised its revenue growth guidance for FY26 to 3 per cent-3.5 per cent from the earlier forecast of 2 per cent-3 per cent on the back of strong Q3 performance.

The company posted a 2.2 per cent decline in its consolidated net profit for the quarter ended December 2025 to Rs 6,654 crore, as it took Rs 1,289 crore hit on new labour codes. The company is expecting a recurring impact of this change at 15 bps p.a.

Infosys had posted Rs 6,806 crore net profit in the year-ago period. The company delivered a strong revenue growth of 8.9 per cent y-o-y at Rs 45,479 crore compared to Rs 41,764 crore it reported in the year-ago period.

The IT services firm's adjusted operating margin stood at 21.2 per cent and its large deal total contract value (TCV) was at $4.8 billion.

During the company's post-earnings press conference, Infosys CEO and MD Salil Parekh said the company had strong momentum in AI adoption across its client base.

"We work with 90 per cent of our largest 200 clients to unlock value with AI. We're currently working on 4,600 AI projects. Our teams have generated over 28 million lines of code using AI," he said, adding that they have built over 500 agents.

The CEO also informed that the company is witnessing emergence of six AI value pools that could unlock a large incremental opportunity. These value pools are AI engineering services, data for AI, agents for operations, AI software development and legacy modernisation, AI deployed on physical devices, and AI trust and risk services.

Parekh said that they are uniquely positioned to capture market share across these value pools. He also added that the company’s large deals pipeline is healthy. Its financial services, manufacturing and energy & utility sectors grew 3.9 per cent, 6.6 per cent and 0.5 per cent, respectively in constant currency terms y-o-y.

On financial services and energy & utilities, resources and services sectors, the CEO said, "The way our work on AI is going and the way the deals have shaped up, we see a good outlook as we look even beyond this financial year into the next financial year."

Last year, Infosys launched its AI-first GCC (Global Capability Centre) Model and when asked about its progress, the CEO told DH that they are already working with clients and that there are several others who are in the pipeline for large AI-specific capability building in GCC.

On partnership, he said they will have a number of different partnerships because there are several smaller companies with great capabilities on AI, foundation model, coding and so on.

"We will continue with these partnerships because those are the areas that our clients are most interested in,” he said.

Gartner Principal Analyst Shubham Rathore said Infosys’s investments in AI platforms, human readiness, and data quality, position it well to meet enterprise demand as AI becomes embedded across IT services. “As clients accelerate digital transformation, Infosys’ disciplined execution and innovation provide a strong foundation for future growth,” he said.

‘No Infosys employee was apprehended by any US authority’

CEO Salil Parekh on Wednesday denied reports claiming that a Mysuru-based Infosys employee was detained or deported by the US immigration authorities.

His clarification comes after a post on social media claimed that an employee from Infosys, who worked in the US, was picked up by Immigration and Customs Enforcement (ICE) agents in the US.

“No Infosys employee has been apprehended by any US authority. A few months ago, one of our employees was denied entry into the US and was sent back to India," he said, during the press conference.

On H-1B visa, Parekh said that the company is continuing with its deployments and delivery, using a mix of work in the US and India. "So, no changes to that approach," he said.