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Informist, Wednesday, Jan. 14, 2026

 

--Infosys: Expect to capture market share across select areas 

--CONTEXT: Infosys management's comments at post-earnings press conference 

--Infosys: Saw 40 basis-point tailwind from currency depreciation in Q3 

--Infosys: Yet to decide on next cycle of two-part wage hike exercise 

--Infosys: Company's large-deal pipeline is healthy 

--Infosys: Expect 15 basis-point impact due to labour codes on annual basis 

--Infosys: In retail segment, seeing positives in select pockets 

--Infosys: Seeing good traction in most subsegments in fin services segment 

--Infosys: Seeing good adoption of AI by our large clients 

--Infosys: Many partnerships in the pipeline tied to AI capability building 

--Infosys: Comfortable with current work model, don't intend to change it 

 

NEW DELHI – Infosys Ltd. Wednesday said the fact that the company has added 13,456 employees in the June quarter, September quarter, and December quarter combined, demonstrates that it has confidence in market demand growing going forward. In another sign of Infosys' confidence that demand will improve, the company has increased its revenue guidance for 2025-26 (Apr-Mar) to 3.0-3.5% in constant currency terms, up from 2.0-3.0% guided for in October.

 

"We have had a lot of large deals in the previous few quarters, plus we had a very strong execution in this quarter (December quarter)," a top company official told reporters in a post-earnings press conference.

 

Further reinforcing the company's bullish market outlook, Infosys' Chief Executive Officer Salil Parekh said the availability of deals and the company being the "preferred partner of choice" with its largest clients for usage of artificial intelligence in their operations helps it adopt a positive outlook for FY27. For the December quarter, Infosys reported a consolidated net profit of INR 66.54 billion on revenues of INR 454.79 billion. 

 

Infosys had in the past said it would hire 20,000 freshers in FY26. So far, it has onboarded 18,000 of them, and is on track to achieve the guidance with many of the freshres being trained currently. "...And we will continue in that sort of a range for next year," the company's management said.

As more and more clients seek to adopt artificial intelligence, Infosys listed six AI-led value pools which would help it unlock large incremental opportunities. These include AI engineering services, data for AI, agents for operations, AI software development and legacy modernisation, AI depolyed in physical devices, and AI trust and risk services. "We believe we are uniquely positioned to capture market share across these value pools and emerge as the leading AI value creator for global enterprises," Parekh said.   

 

Infosys reported an operating margin of 18.4% for the December quarter. However, this includes a 20 basis points impact because of the new labour codes which took effect in November and a 40 bps benefit from the rupee's depreciation against the dollar. 

 

Infosys made a one-time adjustment of INR 12.89 billion in the reporting quarter to account for staff costs as a result of the new labour codes. Excluding the one-time adjustment, Infosys said its margin for the December quarter was 21.2%. Further, the company expects an ongoing annual impact of 15 bps on its margin because of the new labour codes.

 

Infosys does not expect the new labour code adjustments to impact its appraisals going forward. On its wage hikes, the company said it just finished one cycle of wage hikes, which was done in two parts in January and April. It is yet to decide on the next cycle. 

 

The total contract value of its deal wins in the December quarter was $4.8 billion, spread across 26 deals. Going forward, Infosys said its large deal pipeline remains healthy. Demand in financial services, and energy, utilities, resources and services is good, as the company as a positive outlook for deals in these two segments. "Having said that, overall, we want to still see all of the other industries and segments start to show that (traction)," Parekh said.

 

Infosys' revenues from the retail segment fell 5.5% on year in the December quarter in constant currency terms. Parekh said this segment is seeing positives only in select pockets. The company is pushing to improve the situation in other pockets which have been impacted by cost issues.

 

The company earns around 28% from financial services operations. In the December quarter, revenue grew 3.9% on year in constant currency terms. Parekh said it has seen good traction across most sub-verticals of financial services, including in retail banks, mid-market banks, payments, and mortgages.

 

Infosys said it is seeing good levels of adoption of AI by its clients. The company is working with 90% of its largest 200 clients to "unlock value" using AI, it said. It is currently also developing 4,600 projects related to AI.

 

Infosys had in November unveiled its AI-first GCC model, which has been developed to boost global capability centres' use of AI. The company said this venture is seeing a lot of "client activity" and has some in the pipeline, as this is one area where most of its clients seem interested.

 

IT major Wipro Ltd. recently mandated that its employees work six hours at its office, signalling a shift from the COVID-era work from home norm. However, Parekh said Infosys has no plans to change its current work policy. "We will remain flexible in the way we are today, in the way that our employees are interacting with the company and with our clients," Parekh said.

 

Infosys reported its December quarter earnings after market hours. Wednesday, its shares closed with a mild uptick at INR 1,599.80 on the National Stock Exchange.   End

 

US$1 = INR 90.30

 

Reported by Anand JC and Shakshi Jain

Edited by Vandana Hingorani

 

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