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Informist, Tuesday, Apr. 21, 2026

 

By Arya S. Biju

 

MUMBAI – Information technology major Infosys Ltd. may post a sequential decline in its consolidated net profit for the March quarter owing to fewer billing days, higher visa costs, and performance bonus payouts to employees. If the net profit does decline, it would be for the third time in the financial year 2025-26 (Apr-Mar). However, the fall will be limited by the sharp depreciation of the rupee against the dollar and benefits from the company's margin expansion and cost-optimisation programme, Project Maximus, according to analysts.

 

The IT giant's consolidated net profit for the reporting quarter is expected to decline around 5% sequentially to INR 75.56 billion, according to an average of estimates from 18 brokerages. This is slightly better than the near 10% sequential fall in net profit it had reported for the trailing quarter. The highest estimate of INR 77.91 billion for the company's bottom line is from Centrum Broking Ltd. The lowest estimate of INR 73.06 billion is from YES Securities (India) Ltd. 

 

On a year-on-year basis, the net profit is seen rising over 7%, against the fall of over 2% the company had reported in the trailing quarter. But it would still be lower than the year-on-year rise of over 13% and around 9% that it had recorded for the first two quarters of FY26. 

 

The company's consolidated revenue for the March quarter is expected to rise a little over 2% on a sequential basis to INR 465.79 billion, according to an average of estimates from 18 brokerages. This is largely in line with the sequential top-line rise of over 2% it had reported for the trailing quarter. On a year-on-year basis, the metric is expected to rise around 14%, its fastest pace in three years. ICICI Securities Ltd. has the highest estimate for the company's top line at INR 471.05 billion. Indsec Securities and Finance Ltd. has the lowest estimate of INR 459.80 billion. 

 

In dollar terms, Infosys's revenue for the quarter is expected to be $5.07 billion, according to an average of estimates from 14 brokerages. This is largely in line with the $5.10 billion revenue the company had reported for the December quarter. However, in constant currency terms, its revenue for the reporting quarter is seen falling 0.1-1.0% on a sequential basis. 

 

Infosys's banking, financial services, and insurance operations in the US are expected to "remain resilient, with some pockets of discretionary spend(ings)," Motilal Oswal Financial Services Ltd. said. Meanwhile, tariff-related uncertainty and delay in decision-making by clients are expected to have impacted the company's sales from the manufacturing vertical. Further, its West Asia business is expected to remain weak because of the continuing war-related uncertainties, the brokerage added.

 

Analysts are divided on the company's margin performance for the reporting quarter. Some expect it to contract on a sequential basis, dragged down by lower billing days in the quarter, higher visa costs, and the bonus payout announced in early February. Others expect it to remain largely flat or even improve, led by the sharp depreciation of the rupee against the dollar and cost optimisation. During the March quarter, the rupee depreciated 5.5% against the dollar compared to a depreciation of over 1% in the trailing quarter. 

 

The company's earnings before interest and tax margin for the reporting quarter is expected to be 20.6-21.4%, according to estimates from 13 brokerages. In the December quarter, the company had reported an EBIT margin of 18.4%. Adjusted for the impact of the one-time cost of implementing the new labour codes, the company had reported an EBIT margin of 21.2%. The IT company's deal bookings in total contract value for the reporting quarter is expected to be $2 billion-$4 billion, according to estimates from five brokerages. In the trailing quarter, it had reported a total contract value of $4.8 billion. 

 

For the financial year ended Mar. 31, the company's consolidated net profit is expected to rise around 9% to INR 290.27 billion, according to an average of estimates from four brokerages. Its revenue for the full year is expected to grow over 7% to INR 1.75 trillion. 

 

Infosys will announce its March quarter earnings Thursday. Market participants will focus on the company's organic revenue growth and EBIT margin guidance for FY27. While most analysts expect the company to maintain its earlier EBIT margin guidance of 20-22% for FY27, they are divided on what the guidance for revenue growth will be.

 

Of the nine brokerage estimates available, two expect Infosys to guide for a 1.5-4.5% growth in revenue in constant currency terms for FY27, two expect it to guide for 2-4% growth, and two others expect it to guide for 3-5% growth. Of the remaining three, one expects the company to guide for 1-4% growth in constant currency revenue for FY27, one expects 2-5% guidance and the third 4-6% guidance.

 

Market participants will also focus on the management's commentary on the 2026 technology budgets of its US-based clients and spending behaviour by clients amid increased macroeconomic and geopolitical uncertainties. The commentary on the potential impact of artificial intelligence-led productivity gains and measures taken to offset the impact will also be monitored by investors.

 

Further, they will look out for updates on the company's deal intake and deal pipeline, demand trends across verticals and geographies, and change in talent strategy and hiring plan amid AI's rapid progress. Comments on the company's dependence on H-1B visas will also be monitored by the Street, analysts said.

 

Tuesday, shares of Infosys had closed slightly higher at INR 1,313.20 on the National Stock Exchange. The stock was down over 22% since the company reported its results for the December quarter on Jan. 14 and over 34% from its all-time high of INR 2,006.45, recorded on Dec. 13, 2024. At 0929 IST, shares of the company traded 2.6% lower at INR 1,279.50.

 

Of the 20 research reports on the company available with Informist, 17 have a "buy" or equivalent recommendation on the stock and three have a "hold" call. The average target price of the "buy" recommendations is INR 1,788, up over 36% from Tuesday's closing price.

 

Following are the March quarter earnings estimates, in INR billion, for Infosys from 18 brokerage firms in descending order of the estimate of net profit:

Brokerage	Net Sales	Net Profit	EBITDA	Revenue (mln $)	?IT margin
Centrum Broking Ltd.	467.39	77.91	--	--	21.4
JM Financial Institutional Securities Pvt. Ltd.	466.74	77.46	110.97	5.10	--
Nirmal Bang Equities Pvt. Ltd.	464.23	76.96	--	--	21.2
IDBI Capital Market Services Ltd.	466.22	76.93	--	5.10	21.4
Equirus Securities Pvt. Ltd.	469.98	76.92	112.05	5.07	21.3
HDFC Securities Ltd.	466.99	76.10	--	5.12	21.3
Prabhudas Lilladher Pvt. Ltd.	464.00	75.70	--	5.09	21
Anand Rathi Share and Stock Brokers Ltd.	465.74	75.68	109.37	5.09	21
Nuvama Wealth Management Ltd.	463.00	75.41		5.07	21.4
Emkay Global Financial Services Ltd.	467.23	75.34	110.56	5.08	--
Dolat Capital Market Pvt. Ltd.	469.42	75.22	--	5.07	20.6
Elara Securities (India) Pvt. Ltd.	459.99	75.22	--	5.06	--
Motilal Oswal Financial Services Ltd.	463.82	74.95	112.06	--	--
Indsec Securities and Finance Ltd.	459.80	74.60	--	4.95	21.1
Kotak Securities Ltd.	468.44	74.60	--	5.07	21.3
Nomura Equity Research	463.72	74.40	--	5.07	20.8
ICICI Securities Ltd.	471.05	73.56	--	5.10	20.6
YES Securities (India) Ltd.	466.55	73.06	104.37	--	--
Average	465.79	75.56	109.89	5.07	--

 

End

 

US$1 = INR 93.78

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

 

Edited by Rajeev Pai

 

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