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Informist, Monday, Jan. 12, 2026

By Arya S. Biju

MUMBAI – After a slight recovery in the previous quarter, information technology giant Infosys Ltd. is expected to report subdued earnings growth in the seasonally weak December quarter due to furloughs and stagnant demand. Seasonal weakness and lower billing days are also expected to impact the company's top line for the reporting quarter, according to broking firms.

The IT major's consolidated net profit for the December quarter is expected to grow just 0.2% on a sequential basis to INR 73.75 billion, according to the average of estimates from 17 brokerages. This is way lower than the over 6% sequential growth in net profit it saw in the previous quarter. 

The sequential growth in the company's bottom line for the quarter is expected to be the slowest among large-cap peers, except for Tata Consultancy Services and HCL Technologies that have reported a sequential decline in their respective net profits for the quarter. On a year-on-year basis, Infosys' bottom line is expected to rise over 8% but this is still lower than the 13% on-year growth it had reported in the trailing quarter. 

The company's top line for the reporting quarter is expected to grow a little over 1% sequentially to INR 451.04 billion, according to the average of estimates. This will mark the slowest sequential growth in the company's net sales since the March quarter when its revenue had fallen over 2%. On a year-on-year basis, the company's revenue is expected to rise 8%, lower than the nearly 9% growth it reported in the previous quarter.

 
The highest estimate for the company's net profit for the quarter is INR 75.77 billion from JM Financial Institutional Securities Pvt. Ltd. and the lowest is INR 71.32 billion from Kotak Securities Ltd. The estimates for the company's net sales range from a high of INR 454.67 billion by HDFC Securities Ltd. and a low of INR 445.00 billion by Motilal Oswal Financial Services Ltd.

 
While some brokerages expect the company's revenue in constant currency terms to remain largely flat to around 1% higher, others expect it to decline 0.3-1.4% on a sequential basis. The revenues of the country's second largest IT firm by market capitalisation, are expected to rise 0.9% in constant currency terms sequentially in the December quarter supported by execution of large deals but moderated by seasonal furloughs, brokerage Dolat Capital Market Pvt. Ltd. said. On other hand, Nirmal Bang Equities Pvt. Ltd. expects the company's revenue in constant currency terms to decline 1.4% on quarter in the seasonally weak second half of the financial year after it grew 2.2–2.6% sequentially in the previous two quarters. In dollar terms, the company is expected to report revenues of $5.25 billion for the reporting quarter, according to the average of estimates from 13 brokerages. 

The largest segments of the company, financial services and manufacturing, are expected to have been resilient in the reporting quarter due to performance in rate-sensitive segments and improvement in automotive research and development spending, Indsec Securities and Finance Ltd. said. Revenue from the energy, utilities, resources, and services segments, which contributed over 13% of total sales in the previous quarter, is also expected to perform well in the December quarter. Meanwhile, the retail and hi-tech verticals of the company are expected to be impacted by tariff uncertainties and muted discretionary spending, the brokerage added. 

OPERATIONAL METRICS

Broking firms are divided on their views on the company's margin performance for the reporting quarter, with some expecting it to remain largely flat on quarter while others expect it to improve and some expect it to contract sequentially. The depreciation of the rupee against the dollar, benefits from its margin improvement plan Project Maximus, and lower third-party costs are expected to support the company's margin for the quarter, according to brokerages. However, some brokerages expect lower utilisation and operating leverage along with furloughs and lower working days would have kept the company's margins under pressure in the quarter. 

The company's earnings before interest and tax margin for the December quarter is expected to be 21.0-21.4%, estimates from 12 brokerages showed. In the September quarter, the company's EBIT margin had expanded 20 basis points sequentially but contracted by 10 bps on year to 21.0%.

The IT major is expected to report a total deal contract value of $3 billion–$4 billion for the December quarter, estimates from three brokerages showed. In the December quarter, the company announced three deals, including a mega deal of 1.2 billion pound sterling from the NHS Business Services Authority. 

FY26 GUIDANCE

Analysts have varied views on the company's revenue growth guidance for 2025–26 (Apr-Mar). While some brokerages expect Infosys to retain its FY26 revenue growth guidance of 2–3%, others anticipate this will be revised either to the upper end or the lower end of the range. The company is, however, widely expected to retain its FY26 operating margin guidance at 20–22%. 

Infosys will announce its December quarter earnings Wednesday. Market participants will watch for any changes in the revenue growth and margin guidance of the company for FY26 and updates on the demand environment and discretionary spending. Updates on US-based clients' 2026 technology budgets and any signs of optimism in client conversations will also be watched for, brokerages said. 

The Street will also monitor the company management's commentary on its dependency on the H-1B visa and steps planned to mitigate potential impact from fee increase and changes in the H-1B visa allocation process, Emkay Global Financial Services Ltd. said. Further, updates on the deal pipeline, pace of decision-making, and deal closure momentum along with hiring plans will be watched by investors. 

Monday, shares of Infosys ended over 1% lower at INR 1,595.90 on the National Stock Exchange. The stock has risen over 8% since the company announced its September quarter earnings on Oct. 16. The stock is, however, over 20% down from its all-time high of INR 2,006.45, hit on Dec. 13, 2024.

Of the 23 research reports on the company available with Informist, 20 have a 'buy' or equivalent recommendation on the stock, with an average target price of INR 1,836, which is around 15% higher than the closing price Monday. The remaining three have a 'hold' call on the stock with target prices of INR 1,520-INR 1,677.

 
Following are the December quarter earnings estimates for Infosys from 17 brokerage firms in descending order of the estimate of net profit in INR million:

End

US$1 = INR 90.1525

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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