IT bellwether Infosys on Wednesday reported a 2.2 per cent year-on-year decline in consolidated net profit to ₹6,654 crore for the October–December quarter of FY26 (Q3FY26), weighed down by an exceptional provision of ₹1,289 crore arising from the impact of the new labour codes.
Despite the decline in profit, the company surprised the Street by raising its full-year revenue guidance, citing renewed demand momentum across select verticals, including financial services.
The Bengaluru-based company had reported a net profit of ₹6,806 crore in the same quarter last year.
Revenue from operations rose 8.9 per cent to ₹45,479 crore in Q3FY26 from ₹41,764 crore in Q3FY25. In dollar terms, revenue stood at $5,099 million, a growth of 3.2 per cent over $4,939 million a year earlier.
North America contributed 55.9 per cent of overall revenue during the quarter and declined 1 per cent year-on-year, while business in Europe registered a growth of 7.2 per cent.
Growth guidance
Infosys revised its FY26 revenue growth guidance upward to 3–3.5 per cent in constant currency terms, from the earlier 2–3 per cent band indicated in Q2, while retaining its operating margin forecast at 20–22 per cent.
“We had a strong performance in Q3. Our revenue grew 0.6 per cent sequentially and 1.7 per cent year-on-year in constant currency. Our large deals were at $4.8 billion with 57 per cent net new. One of the most significant deals we won was with the National Health Service in the UK. This $1.6-billion deal expands our work in the healthcare sector,” said Salil Parekh, CEO and MD, Infosys.
Parekh said that the company’s large deal pipeline remains healthy, and in sectors like financial services, discretionary spend is getting traction across its markets.
“There is an industry-wide recovery as certain tech spends can’t be postponed beyond a point. It’s this incremental improvement in demand that is helping the industry on a gradual recovery path,” said Centrum Broking analyst Piyush Pandey, who called Infosys’s forecast revision a “positive surprise”.
Headcount rises
Infosys saw its headcount increase by 5,043 in Q3FY26 to 3,37,034 from 3,31,991 in Q2FY26 and 3,23,379 in Q3FY25.
“I think this demonstrates that we have confidence in what we are seeing in terms of demand,” Parekh said.
Attrition for the quarter fell to 12.3 per cent from the previous quarter’s 14.3 per cent on a last-twelve-month basis.
CFO Jayesh Sanghrajka said the company had hired around 18,000 freshers and is on track to onboard 20,000 freshers for the full year of FY26.
AI scope
The IT services major remains bullish on AI spending and has identified six sectors that are expected to drive demand. These include engineering services, data for AI, agents for operation, AI software development and legacy modernisation, AI deployed in physical devices and AI trust and risk services.
“We believe we are uniquely positioned to capture market share across these value pools,” said Parekh.
He said the company is currently working on 4600 AI projects and is scaling its forward-deployed engineer team.
No detention
Parekh also dismissed recent social media speculation that an Infosys employee had been apprehended or deported by US Immigration and Customs Enforcement (ICE) authorities.
“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 clarified during the Q3 earnings call.
The clarification followed posts on X alleging an on-site employee had been held and asked to return to India within two hours.